Controversy is brewing in the Cardano ecosystem, with the introduction of contingent staking causing a stir among stakeholders. While some argue that this feature will enable authoritarian control by allowing stake pools to choose who can delegate to them, others see it as a necessary safeguard against nefarious actors in the ecosystem.
What is Contingent Staking?
At its core, contingent staking is a feature that would give stake pool operators control over who can delegate to their pool.
This feature would be optional, meaning that stake pool operators could choose to allow anyone to delegate to their pool. However, critics of the feature argue it could provide regulators with a backdoor to force SPOs to only accept delegators that meet certain criteria, such as those who go through KYC.
However, regardless if contingent staking is implemented or not, regulators can still exert control over SPOs and limit delegator access. If non-KYC’d staking is prohibited by law, SPOs without control over who delegates to their pool would be forced to shut down.
There is a misconception among critics that if a blockchain doesn’t support a particular feature, regulators won’t be able to impose requirements on SPOs regarding that feature. Critics have argued that contingent staking could lead to censorship and limit user freedom.
Users can always choose to stake with a pool that doesn’t use contingent staking. However, even if every pool in the network opted for contingent staking and required KYC checks, users could still launch their own pool without this feature.
As Pi, founder of SundaeSwap said in a twitter space on the topic, “you cannot have freedom of expression without freedom of association”.
As delegates are free to choose their preferred stake pool to use, we believe SPOs should have the option to control which delegates they associate with. Let’s imagine a scam artist steals hundreds of millions of Ada from users across the ecosystem and then stakes it into your stake pool. The rewards received from that large stake are essentially gained nefariously, and it would be reasonable to want to prevent the scam artist from delegating to your pool.
While contingent staking has been a debated topic in the Cardano ecosystem, we believe contingent staking is low on the priority list for the ecosystem. There are many other tasks that demand attention first, such as developing bitwise primitives and indexed data structures for Plutus. Addressing the developer experience and inconsistencies with the build tooling must take precedence.
Don’t get us wrong, contingent staking could be a valuable feature in the future, allowing SPOs to have greater control over who can delegate to their pools. However, given the limited resources and the many pressing concerns, the development of contingent staking should not be a primary focus for the ecosystem. Rather, the community should prioritize the development of the necessary infrastructure and tools to support the growth and success of the Cardano network.
As a community-driven ecosystem, we encourage you to join the discussion and share your thoughts on contingent staking in the comments!
If you’re interested in learning more about our business and how we are contributing to the growth of the Cardano network, we invite you to check out our website and follow us on Twitter @ikigai_tech and Discord.
Disclaimer
The opinions shared within this article are those solely of Ikigai Technologies and contributors. Note that the content within should not be considered financial, legal, or tax advice. Neither the author nor Ikigai Technologies, et al. are financial, legal, or tax advisors. None of this content should be used to make any form of financial, tax, or legal decisions. Do your own research and consult professionals as needed for official policies, restrictions, and requirements in your jurisdiction.
Why Contingent Staking Shouldn’t Be the Top Priority for Cardano’s Ecosystem was originally published in Ikigai Technologies on Medium, where people are continuing the conversation by highlighting and responding to this story.