Cardano Approaching To Full Decentralization: What Updates Are Expected In December?
Cardano is slowly but surely continuing to move towards creating a completely decentralized blockchain ecosystem. The update of the k-parameter of the network is already approaching. What do stakers need to do now to maintain higher pay rates?
Another step towards decentralization
According to the project roadmap, Cardano’s blockchain platform should become fully decentralized in several stages. Four months ago, a transition to the Cardano Shelley hard fork was made, thanks to which users got access to staking. The next step is scheduled for December 6: on this day, the Cardano k-parameter will be updated, which is the number of pools in the network.
As of today, the k-parameter is 150; after the update, it will grow to 500. This process will be accompanied by a sharp decrease in the reward for large, oversaturated bet pools. Previously, the saturation threshold of pools was 210 million ADA; after updating the k-parameter, it will drop to 64 million ADA. Due to the upcoming changes, the development team from IOHK approached users with a recommendation to start delegating their share to smaller pools. That will keep the higher reward rates after updating the k-parameter.
Will Cardano be more decentralized than Bitcoin?
Thanks to a step-by-step update of the k-parameter, Cardano may become the most decentralized blockchain in the future. The developed incentive mechanism is intended to move away from the model in which control is exercised by the largest pools. In this context, the K-parameter acts as a tool that adjusts the amount of remuneration for pools when a certain saturation threshold is reached. Thus, the developers want to implement one of the main ideas of the project – to provide equal conditions for all network participants.
The higher the k-parameter value, the more decentralized the network is. Moving to k-parameter 500 is an extremely important step towards project implementation. In March 2021, it is planned to increase the number of staking pools to 1000. According to IOHK CEO Charles Hoskins, after the implementation of the planned updates, Cardano will be 250 times more decentralized than Bitcoin. As a result, network bandwidth will increase significantly.
According to the developers’ concept, this incentive mechanism should attract a new stream of users to the network. They will be able to host their own ADA or delegate their coins to network operators, thereby increasing their contribution to the overall development of the blockchain ecosystem. The developers are convinced that Cardano’s move to full decentralization could also have a positive impact on the price dynamics of ADA.