1. Key terms

The same parameter is described by several names. The definitions below are used throughout this document.

Term	Plain-language meaning
stakePoolTargetNum	The protocol parameter being polled. It sets the target number of fully saturated pools in the reward design. It is also called nOpt or k.
Saturation point	The amount of stake a pool can use when its maximum potential reward is calculated. At k=500, the relative point is 1/500 (0.2%) of circulating ada; at k=1000, it would be 1/1000 (0.1%).
Stake pool	A registered participant that can be selected to produce blocks. A pool combines its owners' pledged stake with stake delegated by other ada holders.
Stake pool operator (SPO)	The person or organization that runs a pool and controls its operational keys and infrastructure.
Delegator	An ada holder who assigns staking power to a pool without giving the pool custody of the ada. The ada remains spendable.
Pledge	Ada committed by a pool's owner or owners. The parameter poolPledgeInfluence (a0) controls how strongly pledge affects potential rewards.

In this document, k always means stakePoolTargetNum. It does not mean the separate Ouroboros security parameter that is also commonly written as k.

2. How staking, saturation, and pledge work

Cardano uses delegated proof of stake. Ada holders can operate a pool, use a private pool, or delegate to another pool. Delegation gives a pool more staking power, but it does not transfer ownership or spending control of the delegated ada.

A pool with more active stake generally has more opportunities to produce blocks. Saturation affects rewards, not whether the pool may participate in consensus. A pool can still be selected to produce blocks with stake above its saturation point; the extra stake simply does not increase the pool's maximum potential reward.

Pledge is the owners' committed stake. The a0 parameter determines how much pledge affects potential rewards. If a pool does not meet its declared pledge, it receives no pool rewards for that epoch. Pledge and saturation are therefore reward incentives, not hard limits on block production.

3. Where pool rewards come from and how they are divided

It may help to think of each epoch's reward resources as one shared pot. Stake pool operators are not paid from a separate operating budget, and changing stakePoolTargetNum does not make the pot larger.

1. Transaction fees collected in blocks and emissions from the reserves form the initial reward pot.
2. The treasury receives the treasuryCut share.
3. The protocol calculates each pool's potential reward using stake, saturation, pledge, and performance.
4. From the reward a pool earns, its declared fixed cost is paid first, then its percentage margin is applied. The remainder is distributed among pool operators and delegators in proportion to eligible stake. The protocol performs this distribution automatically.

Because the total reward resources do not change, raising stakePoolTargetNum would apply saturation at a lower stake level and change how the existing reward opportunity is distributed among pools. Retaining it at 500 would preserve the current saturation boundary. Neither setting determines the number of active pools, independent operators, or economically viable pools.

4. Different forms of stake pool operation

The ledger records pools and their registered terms, but it does not label their real-world business model or reliably identify every pool under common control. The categories below can overlap.

Common description	Plain-language description and limitation
Independent single-pool operator	A person or organization publicly understood to control one pool. The label depends partly on disclosure and entity-grouping methods.
Multi-pool operator or pool group	One entity or affiliated group controls several pool IDs. The ledger does not comprehensively disclose common control.
Institutional or ecosystem organization	A company, foundation, project, or association operates one or more pools alongside other activities.
Custodian or centralized exchange	Runs pools using ada held for customers. Customers' ability to choose a pool or governance representative varies by service.
Private or self-staking pool	Primarily serves stake controlled by its owner or sponsor. A 100% margin can make a pool economically private.
Charity or cause-based pool	States that some operator revenue will support a cause. The staking protocol does not enforce that commitment.
Sponsored or externally funded pool	Receives operating support from a business, grant, organization, or another source in addition to, or instead of, protocol rewards.

For these reasons, pool count is not the same as operator count, and operator count alone is not a complete measure of decentralization. Any entity-level analysis should explain how pools were grouped and where the grouping is uncertain.

5. The parameters connected to this question

stakePoolTargetNum does not operate in isolation. The table shows the drafting baseline and the role of the main related parameters.

Parameter	Drafting baseline	What it does	Why it matters here
stakePoolTargetNum (k / nOpt)	500	Sets the relative saturation point at 1/k of circulating ada.	The proposal would set it to 1000, changing the point from approximately 75M ada to 37.5M ada at the drafting baseline.
poolPledgeInfluence (a0)	0.3	Sets how strongly owner pledge affects potential pool rewards.	With a0 unchanged at 0.3, the maximum relative pledge uplift at the fully pledge-saturated endpoint remains 30%. Raising k would halve the ada needed to reach that endpoint.
minPoolCost	170 ada at drafting baseline	Sets the lowest fixed cost a pool may declare each epoch.	The same fixed cost can consume different shares of rewards earned by small and large pools. It is not changed by this poll.
Fixed fee	Chosen by operator	Sets a fixed amount of ada that must be paid to the pool operator before delegators are paid.	It affects the split between operator and members but is not changed by this poll. It cannot be set below minPoolCost.
Variable fee	Chosen by operator	Sets the percentage retained after fixed cost.	It affects the split between operator and members but is not changed by this poll.
monetaryExpansion (rho)	0.003 per epoch	Sets the reserve emission to staking rewards and the treasury.	It affects the amount of rewards available but is not changed by this poll.
treasuryCut (tau)	0.20	Sets the treasury's share of reward resources.	It affects what remains for pool rewards but is not changed by this poll.

The effects of k, pledge influence, and fixed pool cost cannot be reduced to one simple formula for every pool. A pool's actual reward also depends on its stake, honored pledge, performance, declared cost, margin, and position relative to saturation.

6. Historical context

6.1 Shelley launch - July 2020

At the Shelley hard fork, stakePoolTargetNum was 150, poolPledgeInfluence was 0.3, and minPoolCost was 340 ada. The initial settings were deliberately conservative.

6.2 The change from 150 to 500 - December 2020

In epoch 234, stakePoolTargetNum increased from 150 to 500. The relative saturation point fell from about 0.667% of circulating supply to 0.2%, giving oversaturated pools and their delegators a reason to spread stake.

The period following that change coincided with unusually strong growth in the Cardano ecosystem and crypto market. ADA traded at roughly $0.16 on 6 December 2020, around the time k changed to 500; by 19 February 2021 it was about $0.91, and by 30 April 2021 about $1.32. Active stake and delegator participation also increased substantially during this period.

These simultaneous changes are important when interpreting historical observations. Improvements in pool distribution or delegation patterns following the 2020 change cannot be attributed to stakePoolTargetNum alone, and historical outcomes should not be assumed to recur after another increase under materially different market, economic, and network conditions.

6.3 The 2023 SPO poll

The 2023 on-chain SPO poll presented combinations of stakePoolTargetNum and minPoolCost, plus abstain and none-of-the-provided-options. Preliminary results reported 797 pool votes. Because the question bundled two parameters, it did not provide a clean standalone mandate on stakePoolTargetNum.

Grouped result	Share by participating pool count	Share by participating stake
Either k=1000 option	69.64%	About 41.1%
Either k=500 option	21.08%	About 44.2%
Abstain	0.63%	About 0.7%
None of the provided options	8.66%	About 13.9%

The poll looked different when measured by participating pool count and by participating stake. Because it combined stakePoolTargetNum with minPoolCost, it should not be treated as a conclusive standalone vote on k. This Info Action is intended to revisit the question as a single-parameter vote, with SPO support assessed using the standard stake-weighted voting semantics defined by CIP-1694.

7. Direct effects of raising stakePoolTargetNum to 1000

If a later Parameter Update raised stakePoolTargetNum from 500 to 1000 while other parameters stayed the same, it would:

• Halve the relative saturation point from 1/500 (0.2%) to 1/1000 (0.1%) of circulating ada supply.
• Cause pools between the old and new cap to become oversaturated for reward purposes, creating an incentive for affected delegators to reconsider their delegation.
• Halve the ADA needed to reach the fully pledge-saturated endpoint while leaving the maximum relative pledge uplift set by a0 unchanged. Effects below that endpoint would vary by pool.
• Leave the total epoch reward resources unchanged, all else equal.
• Leave stake above saturation active for leader selection and block production.
• Delegators in pools above the new saturation point could receive fewer rewards than they might after moving to an otherwise comparable unsaturated pool. Delegators who do not actively monitor saturation may bear that opportunity cost longer.

It would not automatically:

• Create new pools or independent operators.
• Prevent an operator, exchange, custodian, or organization from registering more pool IDs.
• Determine where redelegated stake moves or whether it remains within the same operator group.
• Produce a guaranteed change in entity-adjusted decentralization or operator viability.
• Change DRep voting power or governance delegation.

8. Outcomes that depend on participant behavior

The protocol mechanics establish the change in saturation and reward incentives. The broader results depend on how delegators, operators, exchanges, custodians, wallets, and other participants respond. Voters are asked to consider questions such as:

• Would stake move to smaller independent operators, to other pools in the same group, or not move at all?
• Would more distinct operators produce blocks regularly, and would entity-level stake concentration change?
• Would operator revenue remain sufficient for reliable, long-term operation?
• Would lowering the saturation point disproportionately disadvantage established independent or community-operated pools that have built substantial delegation over many years through sustained performance, reliability, reputation, and community engagement?
• Would delegator rewards become more evenly distributed or more variable?
• How much stake would remain oversaturated, for how long, and what reward or attention costs would affected delegators bear?
• Would additional pool registrations or relay deployments materially change operator or network costs?
• If k remained at 500, would operator participation and entity-level concentration remain stable or change for other reasons?

Historical observations can inform these questions, but a parameter change on the live network is not a controlled experiment. Other protocol changes, reserve emissions, transaction volume, market conditions, wallet rankings, operator entry and exit, and custodial behavior can affect the same outcomes.

9. Governance context and rationale

Although stakePoolTargetNum is not currently a parameter for which a subsequent Parameter Change Governance Action requires SPO ratification, seeking an affirmative SPO mandate before changing a parameter that materially affects stake-pool economics is consistent with the broader principle proposed in CAP #10, "Require SPO Approval for Changes to Stake Pool Economic Parameters".

Submission of this Info Action should not be interpreted as an endorsement of the proposed parameter change by the proposer. Its purpose is to obtain a clear, standalone, stake-weighted measure of current SPO support for raising stakePoolTargetNum from 500 to 1000, using the established CIP-1694 voting semantics.

10. Conclusion and request to voters

The question is whether there is sufficient SPO support to proceed with a later Parameter Change Governance Action to raise stakePoolTargetNum from 500 to 1000. A YES vote supports that specific next step. A NO vote opposes it as presented. An ABSTAIN vote records participation without supporting or opposing the proposal and is excluded from active voting stake in accordance with CIP-1694.

This Info Action establishes sufficient SPO support only if explicit YES votes represent more than 50% of the applicable active SPO voting stake, calculated according to the standard CIP-1694 voting semantics.

If that threshold is not reached, the result should be treated as an insufficient SPO mandate to proceed with k=1000 on the basis of this poll.

SPOs who oppose the proposed change are encouraged to cast an explicit NO vote and, where possible, provide a vote rationale explaining their position. Under CIP-1694, an explicit NO vote is not required, as non-voting registered SPO stake already counts against reaching the YES threshold. Stake that is registered but does not vote behaves like a NO vote, while an explicit Abstain vote is excluded from active voting stake. Nevertheless, explicit NO votes, particularly when accompanied by rationales, provide a clearer on-chain record of active opposition and additional context that can help interpret the poll result. Providing such a rationale does not alter the vote calculation, but can help document the reasons behind SPO disagreement with the proposed change.

11. Acknowledgements and provenance

This proposal builds on an earlier working draft prepared by Cerkoryn and other contributors. Several definitions and explanatory passages from that draft have been retained or adapted as part of the neutral background material, while the voting methodology, governance framing, and interpretation of the result have been substantially revised. Their work in assembling the background material, initiating renewed discussion of stakePoolTargetNum, and providing useful groundwork for this proposal is appreciated.

The present version was independently refined for submission because the voting methodology proposed in the earlier draft differed from the standard voting semantics defined by CIP-1694. Rather than introducing a special turnout-based calculation for this particular Info Action, this proposal follows the established CIP-1694 treatment of SPO votes so that participants can rely on familiar governance semantics and the result can be interpreted consistently with existing Cardano governance practice.

Responsibility for the final form, interpretation, and submission of this version rests with its proposer.

References

1. Cardano Constitution - Cardano Blockchain Ecosystem Constitution, including SPO voting rules and the >50% active block-production stake standard used where SPO approval is required.
2. CIP-1694: A First Step Towards On-Chain Decentralized Governance - Defines governance action types, Info Actions, and the standard voting semantics, including treatment of YES, NO, ABSTAIN, and non-voting stake.
3. CIP-0108: Governance Metadata - Governance Actions
4. Cardano Docs: Pledging and rewards
5. Cardano Docs: Cardano monetary policy
6. Cardano Docs: Delegation
7. Cardano Docs: About stake pools, operators, and owners
8. Cardano Docs: Protocol parameters reference guide
9. CIP-0009: Protocol Parameters (Shelley Era) - Records initial values and the nOpt change from 150 to 500.
10. Parameter Committee: 8 June 2023 intermediate-state poll results
11. Parameter Committee: 6 July 2023 recommendation
12. Cardano Foundation response and final analysis of the 2023 SPO poll
13. IOG response and implementation schedule for PCP-001
14. CAP #10: "Require SPO Approval for Changes to Stake Pool Economic Parameters" - Constitutional Amendment Portal.