…And Now for Something Completely Different!

There has been an important late-breaking change to the plans about how the decentralization parameter should be decremented. Read on to get up-to-date with the new plan....

What a difference a day makes. Up until last evening, I was expecting that tomorrow (Saturday) would bring the first stakepool-forged blocks to the Shelley-era. That was the official plan too, as communication from Input-Output Global (IOG) had indicated to all of us for several weeks. But then THE VIDEO was released last night. Yes, Charles Hoskinson dropped some significant news in his YouTube video that completely upended all stakepool operators’ expectations on how the hand-off in block production to stakepools was going to proceed.

First, let’s review the original plan. As you are well aware, if you’ve been following my blog series called, “Realistic Expectations for the Start of Shelley Mainnet,” there is a decentralization parameter, d, that will be stepped from 1 to zero over the course of the upcoming months. Currently, d=1, which means no stakepools are making blocks (no decentralization). All we had been told about d was that it would switch to 0.9 in the third Shelley-era epoch, which was the earliest this could happen given the time needed for staking delegations made in the first epoch to go live on the blockchain. At the moment d would switch to d=0.9, stakepools would start making 10% of the blocks. Eventually, d would be stepped down over the course of several weeks until d=0, which would mean all the blocks are created by stakepools (complete decentralization). However, that plan has been revised.

Now, let’s examine the new plan. In the new version of the plan to hand-off block production to stakepools, d will remain at d=1 for an extra epoch. So, instead of d being reduced on August 8th, it will now instead be reduced on August 13th. Also, the amount that d will be decremented on August 13th appears to also be in question. Charles announced in his video that the minimum decrement interval for d will be 0.025/epoch. So, this means that on August 13th, d might be decremented to only 0.975 instead of 0.9, which was the original expectation. So, instead of stakepools making 10% of the blocks, they may only make 2.5% of blocks. However, according to a tweet from Charles today (see below), it seems that he is in favor of going to d=0.9 in the first step that will begin on August 13th.

Let’s calculate how much 2.5% of the blocks in an epoch is. Epochs are five days long, and there is a slot every 1 s, so there are 432,000 slots in an epoch. The active slot coefficient for Shelley is 5%, which means there are 21,600 blocks in an epoch. This further translates to, on average, one block produced every 20 slots, or seconds. If d=0.9, then stakepools would have 2,160 blocks to make. However, if d=0.975, then stakepools will only have 540 blocks to produce. So, there is a better chance that smaller stakepools will have an opportunity to make a block if d is decremented to 0.9 on the first step. If we proceed thereafter at the minimum descent rate, it could take about 200 days to get to d=0, but Charles has said that d can move down faster if the network appears capable of handling it. Let’s hope that we can get to d=0 faster than the minimum rate.

For delegators, the change to this schedule means that the first rewards for staking will not be paid on August 18th, as previously advertised. Instead, the first staking rewards will now be paid five days later on August 23rd.

In other important news for today, Daedalus 2.1.0 has just been released, which should fix the issues with redeeming ITN rewards that plagued release 2.0.1. Click here to download Daedalus.

Do you have any questions or comments? Did I get something wrong? Drop a comment or send me an email using the contact form! Also, if you found this article helpful, please consider passing it on to your friends. Thanks!

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