Cardano Pledge to Delegation Ratio

To discern how secure Cardano's Shelley phase is, at any moment in time, check each stake pools pledge to delegation ratio. Pledge to delegation ratio is a complete way of seeing a stake pools security level, unfortunately, Cardano delegation capable wallets will not be displaying it, because pools overall desirability score implies it.

Cardano Pledge to Delegation Ratio


Why?

Let’s imagine that there are about 100 legitimate, honest pools. If we didn’t guard against it, a malicious player could relatively cheaply create 100, 200 or even 500 pools under false names and claim low operational costs and a low profit margin. Many honest stakeholders would then be tempted to stop delegating to one of the 100 honest pools and instead delegate their stake to one of themalicious pools, which might outnumber the honest pools. As a consequence, the operator of those malicious pools would be selected slot leader for a majority of blocks and so gain control over the blockchain, opening it up to all kinds of mischief and criminal activities, such as double-spending attacks! He would, of course, have to pay for the operation of hundreds of nodes, but that cost pales in comparison with the cost of acquiring a majority stake by buying the majority of all the Ada in existence, which would be in the range of hundreds of millions to billions of dollars.

This would be disastrous because the security of a proof-of-stake system like Cardano relies on the idea that people with a lot of influence over the system should hold a lot of stake and therefore have every reason to help the system run smoothly. 1

(Pledge / (Saturation - Pledge)) =  Pledge to Delegation Ratio
Saturation
(31,112,484,646 / 1,000) = 31,112,485

Pledge is the quantity of Ada that a pool puts up to secure and increase its desirability to potential delegators.

Example, a stake pool has a pledge of 3,111,248 Ada.

(3,111,248 / (31,112,485 - 3,111,248)) = 11.11%

A Cardano pledge to delegation ratio of 11.11% is a very secure ratio.


We put together a slide calculator to gain insight into operating a Cardano stake pool you can view it at jscalc or check the code on GitLab.




  1. Preventing Sybil attacks by Lars Brünjes, Ph.D. ↩︎



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