Fair Initial Stakepool Offering (FISO)

TeddySwap
6 min readJan 27, 2023

We are excited to release the details of our Fair Initial Stakepool Offering (FISO), which will commence February 4th, 2023. This article will explain the details of our FISO that we hope will encourage delegators to stake with single stake pool operators that are essential for a truly decentralized global network. TeddySwap FISO delegators will receive their normal ADA staking rewards in addition to TEDY tokens.

Contents

  1. Introduction
  2. FISO Rewards
  3. Example
  4. Selecting FISO Pools Monday
  5. 100% FISO Bonus via Initial NFT Offering (INO)
  6. Final Remarks

Update: Information on the 10 active stake pools can be found here.

Additionally, Cardano Blockhouse (CBH) stake pool made this resource to track which FISO pools currently has the smallest amount of ADA staked.

We started tracking the smallest pool when all 10 FISO pools were selected at around 3:00 AM UTC on Janaury 31st, 2023.

1. Introduction

Welcome to the first details of our Fair Initial Stakepool Offering (FISO), which will begin February 4th, 2023, and last 12 epochs (2 months).

The FISO is intended to provide more stake to smaller single stake pool operators and help decentralize Cardano’s network. The TeddySwap team will not receive ADA from staking rewards from the FISO, as delegators will receive their normal amount of ADA staking rewards in addition to TEDY tokens.

As we’ve previously mentioned, TeddySwap is inspired on the concepts from both Spectrum Finance and Minswap, as we believe these are the two most impressive teams and projects on Cardano. Our hope is to take the best ideas from both projects and integrate them into TeddySwap, while building a robust StableSwap protocol where we provide a safe place to earn yield with lower risk. Today, we explain the details of our FISO, which was inspired by the brilliant minds at Minswap.

2. FISO Rewards

Initially, 25 million tokens total (0.5% of total TEDY supply) will be rewarded to the participants of TeddySwap’s FISO.

Each epoch of the FISO 2,083,333 TEDY tokens (approximately 2 million TEDY per epoch) are rewarded to delegators. The number of tokens an individual receives is calculated by a scoring system that approximates, every epoch, the percentage of total FISO delegation that their ADA equals. The reason the scoring system is only an “approximation” of each participants percentage of total delegation per epoch is due to two mechanisms:

  1. Whale Limiter.
  2. Smallest Pool Multiplier.

Scoring System (used to calculate participant’s % of FISO rewards each epoch):

  • Under 100,000 ADA delegated: Total points = Total ADA
  • Over 100,000 ADA delegated: Total points = 100,000 + (Total ADA -100,000) ^ 0.9

Smallest Pool Multiplier

TeddySwap FISO participants can earn a 1.25X point multiplier by staking in the pool that has the smallest delegation at the time you stake.

This multiplier will activate after 6 epochs and apply to all future epochs as long as the delegator stays in the same pool.

We expect that smallest pool to often change, but don’t worry, you won’t lose your multiplier.

We will track, through our scripts, what is the smallest pool at all times and the delegations made to this pool. However, you do have to keep your delegation staked in that pool for at least 6 epochs to begin earning the multiplier.

3. Example

For example, at the end of an epoch, there are only two delegators Ted and Smokey.

Ted delegated 100k ADA, equal to 100k points.

Smokey delegated 1M ADA, equal to around 328k points.

Total points of that epoch are 428k.

Ted would earn 100k / 428k = ~23% of the rewards, equal to 2.083333 M * 23% = 479,166 TEDY tokens.

Smokey would earn 328k / 428k = ~77% of the rewards, equal to 2.083333 * 77% = 1,604,166 TEDY tokens.

Example:

100K ADA = 100K Points

1M ADA = ~ 328K Points

10M ADA = ~ 2M Points

TeddySwap FISO Scoring System Chart

Each delegator’s points are totaled up at the end of every epoch and divided by the total number of points awarded that epoch. This is the percentage of the 2,083,333 tokens a delegator receives for the epoch. All full epochs that a delegator stakes for will count towards their cumulative total.

Therefore, if a user decides to unstake from a FISO pool it would be best to do so right after an epoch ends.

TEDY tokens from FISO will be available shortly after the launch of the DEX, which is scheduled for Q1 2023, and will be available for claim on TosiDrop. 20% of TEDY tokens from FISO will be available shortly after launch and the other 80% of TEDY tokens will be available 45 days after that date.

4. Selecting FISO Pools Monday

The TeddySwap FISO will have a total of 25 stake pools. There will be 10 active pools, and 15 reserve pools. The 15 reserve pools will be opened once each of the 10 active pools reach 5 million in ADA delegation.

Applications to become a TeddySwap FISO pool have already concluded, and a total of 102 pools qualified to be a pool. All pools that fit that criteria were assigned a number 1 to n.

We made a website where the assigned numbers for each qualified stake pool can be found.

This Monday, January 30th, 2023, this site will display, in real time, the 25 pools that are randomly selected to be TeddySwap FISO pools. The green boxes will display the active pools and the blue boxes will display the reserve pools.

TeddySwap FISO Website

Verifiably Random Selection Process

Our community will be able to watch which TeddySwap FISO pools are selected in real time. The selection process will be based on a cyclic division of the block hash using the modulo operator. The resulting number will be used to index into an array of qualified pools, which is ordered based on their pool id (which is a hash) and sorted. This ensures that the selection of pools is random and unbiased, and provides a way to periodically update the set of chosen pools. Furthermore, by ordering the pools based on their pool id, it ensures that there is a deterministic ordering of the pools, which can be useful for debugging or auditing purposes. In case a block hash results in a number that maps to a pool that has already been chosen, the block will be skipped, and the next block will be used based on the predetermined interval. This will ensure that the final set of chosen pools is unique, and no pool is chosen more than once.

This gives us a verifiably random selection process to ensure all qualified FISO applicants have a fair chance to become one of the 25 TeddySwap FISO pools.

5. 100% FISO Bonus via Initial NFT Offering (INO)

There will be an additional 25 million TEDY tokens available for FISO delegators, a 100% increase from the 25 million TEDY already allocated. This allocation is from our Initial NFT Offering (INO), which will be announced shortly.

Those who participate in our INO will be rewarded boosted FISO rewards, along with other bonuses to be mentioned soon.

6. Final Remarks

Thank you to our community for your support. Our FISO is intended to support small stake pools while further decentralizing the Cardano network. We look forward to your participation and are looking forward to watching which pools are selected to be a TeddySwap FISO pool this Monday.

Within the coming days, we will announce the details on our Initial NFT Offering (INO), where users will be able to earn boosted rewards on the FISO and more.

In the coming weeks, we will continue to update our community on development progress along as we look to launch in Q1 2023.

We thank each and every member of our community for your support thus far and look forward to what we can achieve together.

For more information on TeddySwap:

Website | Twitter | Telegram | Discord | Docs | Github | Medium | Linktree

TeddySwap aims to be an open-source and secure decentralized exchange AMM protocol focusing on stablecoins in the Cardano ecosystem. Our protocol is developed by former Cardano Foundation developers and the creators of plu-ts, a smart contract framework built to efficiently deploy Cardano dApps.

Disclaimer: The content of this article is for informational purposes only, you should not construe any such information or any material on the TeddySwap site as legal, investment, financial, or other advice.

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