Cardano Foundation to Adjust its Delegation Methodology Following Changes to the k-parameter
On 5 November 2020, IOHK outlined its plans to change the k-parameter* starting from 6 December 2020 during epoch 234. In a bid to accelerate decentralisation, the k-parameter will be increased from k=150 to k=500.
In order to keep our delegation methodology transparent, we would like to give you a brief update on our next steps following the planned k-parameter adjustment, and outline the reason for deferring our re-delegation last week. The adapted reward sharing scheme through the new k-parameter will affect both stake pool operators and delegators alike. It will also affect the Cardano Foundation’s staking methodology.
Our delegation methodology is carefully designed to support and involve new individual stake pools, serving decentralization and the interests of the wider community. In order to be able to delegate to a larger number of pools after 6 December 2020, we must adapt our staking approach and make significant changes to our operational infrastructure.
Some of these operational changes were initiated last week to ensure that our operative system will be ready for December. As a result, we did not re-delegate last week as planned, instead postponing our re-delegation to the end of this week. There may be some further changes to our staking methodology until the beginning of a new epoch on 6 December 2020. In every event, we will proactively inform you about interruptions via the appropriate channels.
As soon as the impact of the k-parameter is reflected in the new stakepool landscape, the Cardano Foundation will adapt its delegation methodology and announce the changes in a timely manner.
In the meanwhile, we thank you for your support as we prepare to adapt our methodology. If you have any further questions about the Cardano Foundation’s staking methodology, please let us know below, and we will address your questions directly or include the information in future updates.
If you are a stake pool operator or an ada delegator, you may be required to take some action to ensure that your staking or delegation rewards are maintained. You can find out more in IOHK’s blog on staking parameters and decentralization.
The Cardano Foundation team
*What is a k-parameter? The k-parameter determines the stake pool saturation point, ‘k’, which governs the rewards stake pools receive according to how much stake is delegated to them. The k-parameter plays an important factor in keeping the Cardano blockchain adequately decentralized and encourages ada holders to delegate to a wider number of pools.