Cardano’s Largest Pools Seem To Be Over-Staked At The Moment

Cardano’s largest pools seem to be over-staked currently and the issue will still be observed for the upcoming weeks. As per the latest reports that we have in our Cardano news, the AdaPools.org platform indicates that 18 of Cardano’s 249 active staking pools are saturated as of January 4.

In regards to value, 33 percent of all staked ADA was allocated to 7% of the active pools. IOHK considers the pools with more than 1 percent of all staked funds to be saturated. The rewards are later shared with fewer people and the pool becomes ‘’less desirable’’ as IOHK noted on Twitter. The users, who fail to switch to less saturated pools, seem to earn lower rewards which are only a system to keep the pools from becoming centralized.

Though Cardano has a few large pools, the majority of Cardano’s largest pools are not over-staked. The research shows that each pool is ranked by the amount of ADA that it has staked so by definition, it lists the most saturated pools first and it is not clear if the users will want to flock to certain pools or if the saturation is just the outcome. The pools that offer low fees and higher rewards do not appear to be saturated however, the pools that are run by Cardano ambassadors seem to be attracting a lot of staked value because of their official nature.

Despite the fact that the pools are indeed saturated, Cardano has a large network with a huge potential to be more decentralized. The project attracted a lot of active pools and the users have staked about 9.5 billion Ada on the testnet. It is also possible that the network will grow larger when Cardano launches staking on the Shelly mainnet this year. The changes in the staking process are clearly needed so Cardano has to shift the incentives to encourage movement between the pools.

Pool listings sites will have to sort the pools in a way that makes unsaturated pools more visible to the public. The users have also requested saturation alerts and switching between pools which will make the entire process much more easier. The staking process is fairly simple and it seems that the process will not be as simple as ‘’set it and forget it.’’ Over-staking has been a long-running issue on the other blockchains that heavily rely on similar delegation systems such as Tezos.