Update on/ What not to do with IOHK’s community delegation

Did we get it?

Unfortunately, Huatpool didn’t get selected but we will try again next round! 

We are however happy to share that we had been trusted with a total live stake of $4.2m from our 7 delegators. After our 1st ever block minted on Epoch 262, we had minted another 5 blocks thus far. With a continued strong base and additional delegated stake, we are striving towards improving and being consistent with our block production in every Epoch. 

So who got the community stake?

Generally, other even smaller SPOs who could really use the additional delegations to kickstart their block production. It is always heartwarming to see IOHK/CF nurturing the very people who are helping to run the decentralisation of the Cardano Ecosytem.

Sadly, there was a certain SPO who, despite the clear guidelines, decided that they would try to game the system. As much as we hate to bring more attention to this SPO (any marketing is good marketing), we called out against it, alongside more experienced SPOs.

To summarise, this SPO was selected and was delegated with $15m. With this delegation, block production is likely guaranteed for the upcoming epochs. 30mins before the Epoch transition, he decided to increase his margin fees to 3400ADA per epoch and to 99% variable fee.  What this translates to was that all his delegators will get no rewards from the additional funding provided to the SPO. It was a purely self serving move, driven by greed and go against the basic principles of the Cardano network. Rightfully, there was a huge backlash from the community once this was found out. 

This SPO naturally assumed a victim mindset and released a statement thereafter to try and clarify its actions. Besides claiming that the statement was an response to the online badgering he received, he updated that all his delegators (28 including IOHK) was agreeable to his actions of increasing  the fees. Not only was this a preposterous defense, it made it all the more clearer that his actions were only self serving. 

After being informed of this manipulation, IOHK/CF immediately withdrew their delegation and tweeted that this was in violation of the application guidelines. Kudos to them, this strong response was absolutely required to deter any destructive mindsets. 

Conclusion & Huat thoughts

This was a classic case of greed, which the SPO probably was hoping to go unnoticed by the community. 

If people gave you money to invest, would you immediately increase your fees resulting in little to no rewards for the people who trusted you with their money? 

Obviously, the SPO was testing the system and loopholes to try and make a quick profit /improve his pool ranking off a lumpsum (but temporary) angel investment. Although he claimed his delegators approved his actions, no delegators would do that in their right mind, unless they are family and friends who are in it together. 

Huatpool is glad to know that CF/IOHK took immediate action and withdrew their delegation. This was a strong and necessary signal to deter any potential misbehaviours in future. Although Huatpool didn’t manage to be selected, we are also happy to know that other more in need and deserving SPOs managed to kickstart their block production and further improve the Cardano ecosystem. As evident by this blemish of an SPO above, this incident clearly shows the strength of the Cardano community against any self-serving actors.

Thankful to be a small part of this community.