Cardano: Massive Staking Pool on Shelley Testnet criticized for centralization

  • About 30 staking pools have formed a cooperation to increase their block production on Cardano Shelley Incentivized Testnet (SIT).
  • The group has been criticized by the Cardano community. Users claim that the initiative runs counter to the decentralization of the network. 

About 30 staking pools on Cardano‘ Shelley Incentivized Testnet (SIT) have formed the “Inter Stake Pool Peering Agreement” (ISPPA). According to the website, the operators of the group have produced around 42,000 blocks in total. In other words, about 12% to 13% of the blocks since the start of the SIT.

The official goal of the alliance is to “test and achieve” better functioning of the network infrastructure and increase block propagation. These objectives, according to ISPPA, are easier to achieve with the alliance. In addition, ISPPA adds:

It involves connecting the pools and relay nodes as preferred meaning that these nodes will form a huge cluster located all over the world that will be constantly inter-connected and exchanging data. The preferred option technically adds a fourth layer of communication on top of the 3 communication layers of Cyclon, Rings and Vincity.

The group clarified that the alliance will include other groups in the flow of information, claiming to be “firm” believers in decentralization. In addition, the operators of the groups will continue to operate as independent entities. On the other hand, the group has proposed to extend the number of SIT modules by adding a fourth module. ISPPA says:

This module will extend the accumulated views of the PolderCast’s modules (adding more nodes to be selectable by the different modules for gossiping or relaying).

Criticisms from the Cardano community

The formation of ISPPA has received criticism from the Cardano community. Some users respect the capacity of free association that the groups have in the SIT. However, they claim that ISPPA can become a project that threatens the decentralization of the network. Users also showed concern about the possible formation of a larger group that could launch a coordinated attack against the Cardano network.

In addition, some users also pointed out that the ISPPA group have a stake of 1.2 billion ADA. As Crypto News Flash reported, almost 11.35 billion ADA have been staked and delegated so far in the Shelley Incentivized Testnet. Therefore, ISPPA would have staked about 10% of the total ADA supply. This gives them a network dominance that excludes smaller groups that make up the majority of block producers.

Users were unable to reach a consensus on the formation of ISPPA, some users claimed that the group would bring benefits to the network. Others prefer to wait and see how the group behaves. Although most remain skeptical about the group’s good intentions.

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About Author

Reynaldo Marquez has closely followed the growth of Bitcoin and blockchain technology since 2016. He has since worked as a columnist on crypto coins covering advances, falls and rises in the market, bifurcations and developments. He believes that crypto coins and blockchain technology will have a great positive impact on people's lives.

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