Cardano, a well-known blockchain platform, has made an important change to its staking parameters. They lowered the minPoolCost parameter from 340 ADA to 170 ADA. This adjustment was announced by the Cardano Foundation on October 24, 2023. It’s a noteworthy development for ADA.
The Cardano Foundation shared the news on X, explaining that they made this change following a Stake Pool Operator (SPO) poll and a review by the Parameters Committee. They successfully lowered the minPoolCost parameter from 340 ADA to 170 ADA on the Cardano mainnet.
This change is significant because it affects staking pool operators. It’s intended to make the environment fairer and encourage more participation from smaller pool operators.
Stake Pool Operators Respond to Cardano’s Staking Parameter Update
One Cardano staking pool, known as “Stake with Pride,” promptly embraced the new staking parameters. They announced their intention to adapt to the modifications, stating, “The Cardano min Pool Cost fee has been dropped to 170 ADA from 340. SPOs can drop their fees starting epoch 445 on October 27th.”
To optimize their policies following these updates, the pool committed to keeping their “minPoolCost” at 170 ADA indefinitely. They also mentioned that they would temporarily adjust their margin to 0% while assessing market dynamics.
The Importance of the Update
The minPoolCost parameter has been a key element of Cardano’s ecosystem since its introduction during the Shelley launch in 2020. It served two essential purposes.
Defending Against Sybil Attacks: One crucial role of this parameter was to safeguard the network against Sybil attacks. These attacks involve a single entity creating multiple fake nodes to gain control over the network. The minPoolCost helped prevent this by setting a cost threshold for operating a stake pool.
Ensuring Minimum Income for Pool Operators: The parameter also ensured that stake pool operators received a minimum income to support their server operations.
Reasons for the Modification
The Cardano Foundation decided to reduce the minPoolCost parameter, moving it from 340 to 170 ADA. This adjustment wasn’t enforced but allowed stake pool operators to lower their minimum income threshold. The purpose of this change was to create a fairer environment for smaller pool operators, enabling them to compete more effectively in the Cardano ecosystem.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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