hi this is charles hoskinson broadcasting from warm sunny colorado on sunday sunday fun day let's talk a little bit about steak pools i just recently got off the cardano effect today and we had a lovely time discussing some of the intricacies of staking and stake pool operations and you guys may have noticed that input output has decided to host its own state pools and much to the dismay of some and that's a temporary affair we'll uh come up with something a bit more permanent and due course but for the month of august and september that's where we're at so here's the thing about staking in the beginning there was a chalkboard so we had a blackboard and that blackboard was in scotland and you know with some chalk people talked around it and thought around it and they came up with the initial idea of how staking should be done okay then oxford got involved and then suddenly the concept got a little bit more refined then the engineers got involved we started writing specs and then suddenly the concept got a little bit more refined then we finally released the itn and then the concept got even more refined because people outside of it were working on it then we released shelley see where i'm going with this july 29th you see nothing is static in a distributed system that's decentralized things change and from the initial idea the concepts that we had there to when oxford guys got involved and then when the specs were written to the itn to here things change that's the constant factor things are always going to change formulas are going to change incentives are going to change parameters are going to change new parameters going to be added other parameters retired because at the end of the day what we want to do is create a relationship that as the price goes up we get more decentralized without trading security we want to stay at the same level of security or have it go up and we want to get more decentralized that's really our goal okay and we're almost there but you see the thing is that what we do as scientists and engineers is we worry about the technology and we worry about the science but then there's also this business of staking where it has to be profitable and there's a business ecosystem that needs to be built out okay so for the business of staking the stake pool operators need to work with us the foundation and other actors and we need to start thinking about unifying standards and lobbying for what spos need okay so a natural evolution from where we are at here where do we go from here are things like a trade guild perhaps guilds many that's not killed that's guide can't spell today it's actually up all of yesterday that was a very tough day a trade guide trade guilds we're basically groups of spos they band together to create standards collectively bargain think about things every single endeavor in life has a trade association associated with you if you're an actuary there's a group of official actuaries if you're an accountant there's a group for that same for lawyers like the american bar association and so forth why don't we have a stake pool operation a state pool service a staple guild we need some sort of association and that will organically naturally form but my recommendation is the spos get together and since the dc fund is coming soon outline a ballot to actually create one and you know what some people were concerned oh well it's a centralized organization well once you put in the charter of the organization to initiate it as a dao this will force us to build a dao on cardano right so we kill two birds with one stone we start already talking about decentralized autonomous organizations or perhaps a do a decentralized organization that lives on the cardinal blockchain and at the same time we start organizing the stake pool operators in very productive nice ways to start collectively talking about things another thing that we discussed was this concept of going from one two one delegation to one to many so one wallet can delegate to many accounts okay so what does that mean it means that instead of having to create 10 wallets to delegate to 10 stake pools you can just fractionally delegate to them this opens up the idea of almost like playlists for you know how you know you have people share music with you they say here's my favorite playlist bob's playlist or something like that well similarly you could have portfolios based upon things you're interested in and they have different allocations in terms of percentages for these lists and people can share them and curate them so you say i'm really interested in uh water projects in africa well these five stateful operators are doing things there i'm really interested in people subsidizing independent client development all these seven stake pool operators are involved in that or donating their time to that or something or i just want to maximize profit well these four lists are like that so instead of just picking a delegation preference from the delegation center you could actually have a portfolio center and you can import lists created by people and also this state pool association can curate and create a whole bunch of lists itself what's nice about this is that they can make sure that there's standards in the list to always blend in some verified small spos so if they're part of that then they can have a rising tides and be part of that as well so this is something that will come when we have one to many delegation and it's a very easy feature to integrate into daedalus because we already have the news feed and what we can do is just have people subscribe to different things and then people can talk around what are the benefits this also creates this expert class in the system you know we talk about experts in terms of the voting system having some influence on the ballots and as we build out voltaire we can do that well an expert class can also develop for preferred stake pools to be delegated to and people can work with that another thing is that right now stateful operators are really thinking insular one one person at a time or small operations there needs to be partnerships okay and we're gonna do what we need to do to make the technological side of the partnerships easier for example we're in discussions right now about improving ledger and tresor so that ledger and trezor can be used to be a safe environment to run a lot of the stake pool mechanics like pledge and other things like the kes and so forth so you have an air gap system that can do all those things for you but then we're also going to be discussing merging that work with multi-sig so multi-sig plus having trusted hardware means that you could potentially start pulling pledge together through many people and then suddenly you could have consolidation of very small stake pools into aggregate pools okay so sp of collaboration so a bunch of stake pool operators working together for a common good uh so these are some of the things that are coming and we're really keen to build out this entire ecosystem as for the iowa global pools as i mentioned we're going to run that for august and september but my goal would be to have a blending of private public and community delegation with that and we'll publish that now these playlists this idea of a portfolio of state pools this is also probably going to help the cardano foundation tremendously the cardano foundation has a lot of ada hundreds of millions of ada units and it would be in their best interest instead of having to sit down every day with a committee and go through all each and every one of these tiles and figure things out to have several community curations and just picks uh three or four of those uh portfolios and then adjust them on a quarterly basis or something like that it's the same when you talk about vc funds or other people that are taking positions in ada they have to make some decisions about what to do if we have the ability to make these decisions in aggregate and they can well balance and offset risk because professional investors worry about risk management so obviously the concept of a portfolio is really interesting to them so i think you the community can come up with great ways of doing this and have them as a crc that we can implement into cardano chrono request for comments right part of the cip process and i can have daedalus support that i'm sure the heroic guys would be quite interested in it and i also think you guys can create your own organizations you know things like the js foundation exist you know you know things like the w3c exist things like the ietf exist you know there's the diff the digital identity foundation there's hundreds of these things it's actually not that hard to set one up and dream one out you know there's funding available there's funding from the dc fund there's funding potentially from the foundation there's a lot of people who have a vested interest in these people coming together we have to get off of telegram and reddit pull everybody together into different groups so that different constituencies can be recognized innovation management challenge is figure out how to do this as a dao look at aragon look at all these other things that are floating around and think about and say how do we build decentralized control and how do we make sure that we're inclusive for small stakeholders on our part we're going to continue doing the game theoretic research we never got rid of the blackboard we never got rid of oxford they're still here and they're still listening and they're still thinking very deeply but they're only as good as the inputs that they get in design requirements that they get from the community so the more problems we find that circle continues and that is ultimately why cardano is going to be number one it's not about where we're at today it's about recognizing that we are on the spiral and one day when we wake up we'll be here and our competitors they kind of are closed systems in that respect it might be very large and big like bitcoin but eventually the spiral gets larger until eventually it eats the whole world that's what feedback loops are all about and that's where we're at so that i throw the gauntlet on the ground for you guys the spos be productive band together and start talking deeply about these parameters the reward function we had a great discussion on the cardano forum not too long ago with lars and the rest of the gang about the rewards function that's a first candidate that reward function and it's entirely possible for it to evolve grow and change over time and that discussion and counter ideas and so forth materialized and people are thinking very deeply about this stuff in fact the the uh proposed formula that came from the community member was actually the subject of one of our chief scientist meetings so we do listen and we oftentimes do apply that listening as for these curations i think this will be one of the single biggest factors in getting stake delegation to smaller actors and promoting decentralization of the system because people will delegate to a portfolio and if you happen to be in that portfolio good to go and the aggregate reduction in profit is very small for the delegators so they don't even notice all things considered but because there's many people following those lists it's a game of numbers it becomes a sustainable business model another thing is that there are going to be multiple business models for spos from running hydro channels to becoming domain experts and getting paid to be experts to other revenue streams from multi-assets that are on our system uh etc etc so there's going to be a lot of ways to uh to make money as an spo this is just the beginning and it's a little frustrating it takes a little bit of time to get through it but it's time very well spent i think the community has done an incredible job coming together in a very short period of time and the fact that they feel free to criticize and they feel free to disagree but not be disagreeable tells us that we really have the right community and i had a lot of fun on the cardano effect today uh there were some uh not so happy people there uh but rightfully so because we made decisions that impacted them and they felt that they had the right to speak up and uh we're still all friends we're still here and we're still growing as an ecosystem and i really want to see this spiral grow and grow and grow and you know what we already have all the evidence that it is 900 state pools have registered we haven't even started staking yet that happens soon uh your first rewards payout august 23rd and so the first community blocks will be made very soon and we're already making a huge amount of progress towards decentralization and we haven't gotten started with decentralization so imagine where we're going to be at in november imagine where we're going to be at in march imagine where we're going to be at in june of next year it's just going to be so different and there's going to be so much going on and a lot of the heavy lifting is now being done by others which is the key behind resilience and decentralization you see so quick video about this uh i we're exactly where i thought we would be a little ahead actually uh and i'm glad that we're starting to see theory meet reality and that reality is giving us some great guidance and all that training and preparation paid off and i think that our community's best days are definitely ahead of it and i believe very firmly that these staking guilds are coming and i believe very firmly that we're going to get curated portfolios of staking at some point soon we're going to do our part make the software better add more features and functionality make it faster make sure that we honor that entire card on a 20 20 road map build up voltaire and push those experiments aggressively and of course push the idea of a next five years and where we need to go and hopefully the community is with us on that but regardless of where we're at this spiral looks good and cardano's going to be around in a hundred years long after i'm dead still going to be here still doing things and that gives me a great degree of comfort and it gives me a great degree of comfort that we've built something that i firmly believe will become at some point the world's financial operating system and provide value to not just the cryptocurrency space but to everybody in need of an economic identity it's easy to forget in the short term why we do what we do but the point is that we are building something that central banks of the future can use as their own settlement system we're building things that governments could trust with their voting systems we're building things that can easily quantify and qualify markets of entire countries especially ones that need a replacement from where they're at and we're building them with our values and principles which is decentralization resilience power being pushed to the edges and a voice to everybody in the system instead of just the people who curate and control the system you have to work really hard to get there some compromises have to be made along the way here and there you have to balance concerns and not everybody's going to win in every decision made but that's the point of innovation you break a few things along the way and that's okay especially if the mission is just and the cause is just and i firmly believe that and every one of these spos they're doing their small part uh to ensure that our ecosystem gets there and we're already more decentralized in terms of consensus uh than bitcoin is and that's just the beginning imagine where we're going to be in five years or ten years all right thank you so much for your time as always a lot of fun i enjoy you guys immensely and uh comment in the uh on the video and send me some tweets and so forth about what you think uh and if this is interesting you guys really want to push it have an internal meeting bring your people together and really think about creating a ballot and come to door he's always open for this we'll even help you guys structure a ballot for the dc fund uh we certainly could give a grant to do that but i think it's really important that the funding for something like this comes from the community itself from the protocol itself because that means that you are 100 free to speak your mind and operate in the way that you feel and that's the where decentralization is most powerful when people have independence and this is the surest way of guaranteeing that cheers
