About Cardano Pledging
The incentive mechanism of the public decentralized network is a complex topic. It is necessary to find a balance between the best interest of the network and the interest of stakeholders. Let’s dive into Cardano pledging.
The balance between the network and stakeholder interests
Network and stakeholders have their interests and the conditions must be designed in a way that the needs of both are satisfied. In the following article, we have described an economic and incentive model of Cardano’s Proof-of-Stake (PoS). We recommend reading it to understand all details, namely rewarding mechanism:
ADA coins, including Lovelaces, are the base units of the consensus power. A pool is an entity that needs to collect a certain amount of consensus power in order to actively participate in the network consensus. To be more precise, only a pool with a certain size can be assigned the right to produce a block. Nodes of pool operators actively participate in the network consensus. The power of a single pool is determined by the total stake. The stake is a sum that consists of ADA coins of the pool operator and stakeholders. Stakeholders can independently choose to which pool they delegate ADA coins. Thus, stakeholders can directly increase or decrease the consensus power of a pool. Remember, when stakeholders delegate coins to a…
