We are starting a new segment on The Cryptonomist, the Cardano SPO Column. This initiative will be a point of reference for everything Cardano and every 2 weeks we will invite a Stake Pool Operator (SPO) to answer some questions and give us an update directly from within the Cardano community.
Considering that many of our readers are new to the crypto space, we will have a mix of simple and technical questions.
This week’s SPO will be CardanoFans (ticker: CRFA).
Hi CardanoFans, thank you for inaugurating this column with us.
Can you give a brief overview of what is Cardano and how does it differ from Bitcoin and Ethereum?
Cardano is a 3rd generation blockchain that is aiming to become a global financial operating system. Their academic approach and the use of formal methods are some of the features that are making this blockchain attractive to developers and users. As opposed to Bitcoin and Ethereum which use the energy-intensive Proof of Work, Cardano uses Proof of Stake which is much more environmentally friendly but also allows for greater scalability.
Who are Stake Pool Operators (SPOs) on Cardano?
Stake Pool Operators are people that operate the so-called stake pools, to which users (delegators) can delegate their ADA (Cardano’s currency) and earn staking rewards at around 5% APY. SPOs are essentially the validators of transactions and contribute to the decentralization of the Cardano network. There are currently over 2000 stake pools and over 400 thousand delegators.
What about you? What has motivated you to become an SPO?
Our goal is to support the Cardano ecosystem, especially its decentralization. We see a few operators that only extract value (rewards) but do not contribute back to the Cardano ecosystem. This is undesirable and not sustainable.
Cardano’s d parameter has reached zero recently, what does this mean?
It means that there are no BFT nodes run by IOG, Emurgo or Cardano Foundation and that all blocks are produced by independent stake pool operators. The parameter going from the initial value of 1 to 0 essentially meant that the block production gradually shifted from being centralized to becoming decentralized. This milestone ended the Shelley era of the Cardano roadmap.
What is coming next for Cardano?
The next step will be the Alonzo hard fork, which will add the smart contract functionality. Testnet of Plutus will be released in about 1 month and smart contracts should be on the mainnet in July/August. However, one can play already with smart contracts via the Plutus simulator: https://playground.plutus.iohkdev.io/ and there are a few cool educational videos about Plutus from a user named: Leet Dev on YouTube.