The inventor of Cardano believes that critics of contingent staking do not ‘understand a basic idea


After suggesting contingent staking to assist the cryptocurrency market to comply with regulatory standards, Cardano (ADA) founder Charles Hoskinson has received numerous questions and comments from the cryptocurrency community criticizing his idea.

On a February 16 Twitter thread, Hoskinson expressed his disbelief at these responses and attempted once more to explain why contingent staking is a good idea for the cryptocurrency community.

As he said: “I’m still confused after reading some of the remarks about contingent staking. It is amazing how polarized certain individuals have grown to the point where they cannot comprehend a fundamental idea and continue to misrepresent it.”

In addition to emphasizing that contingent staking “does not replace normal staking” or private pools, the Cardano founder stated that “a marketplace of [stake pool operators (SPOs)] would continue to exist and allow individuals to continue delegating according to their preferences, including normal stakepools.”

His own words: Critics of CS don’t seem to grasp the gravity of accepting customer funds before establishing entrance requirements and contracts in a [initial stake pool offering (ISPO),] which is extremely risky. Also, they seek to remove all authority from SPOs, arguing they are a public good!”

As Hoskinson emphasized, SPOs are “an optional but valuable service provider like mining pools in Bitcoin to improve network quality and reduce reward variance” that should have a vote in their business ties, and the public good has nothing to do with this situation.

He emphasized that everyone should ponder on this moment and that the Cardano community should not become “a reflection of the wider divisions most western democracies are currently experiencing.”

As previously reported by Finbold, Hoskinson proposed the contingent staking approach that focuses on know-your-customer (KYC) practices and uses a two-sided transaction certificate (signed by both the delegate and the SPO), allowing SPOs to consent to the delegation before it occurs.

His recommendation came as a result of increased government scrutiny of staking activity in the cryptocurrency industry, which has already resulted in one major exchange, Kraken, ending its staking services to U.S. customers as part of a deal with the U.S. Securities and Exchange Commission (SEC).

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