On Friday (September 2), the operator of the Bloom Stake Pool explained why, despite “game theory flaws,” “Cardano’s proof of stake design is objectively better than Ethereum’s POS design.”
Here is how Kraken Intelligence, the research arm of crypto exchange Kraken, described staking in Cardano in a 42-page research paper (titled “Cardano: A New Generation in Smart Contract Platform Design) published in early February 2022:
“On Cardano, validators receive rewards in the form of ADA for running nodes that operate and secure the network. To invite more equal participation, Cardano offers stake delegation, where a stakeholder can delegate their ADA to another validator if they don’t have the technical knowledge or desire to run a node themselves.
“In return, the delegator will receive a share of the total staking rewards going to the validator in proportion to their ownership of the total ADA staked by the validator, minus operational fees. This is why validators on Cardano are called stake pools, as they pool the stakes of many delegators into a single validator. The person/organization running the validator is called the Stake Pool Operator (SPO).”
The Bloom stake pool operator took to Twitter earlier today to explain why Cardano has a better PoS design than Ethereum:
“On Cardano, users can stake into a pool from their own wallet. At ETH, you have to send your tokens to a contract that can be hacked. The only way to keep your tokens on $ETH (locked) is to have 32 $ETH and the technical knowledge to set up a node. Your tokens will only be unlocked after the Shahai upgrade. Cardano users can withdraw their rewards or wagers at any time.
“Ethereum is at risk of trade-offs. In this case, the validator node you bet on is misbehaving, it can shorten up to the full 32 $ETH. Cardano will not be truncated. There is also no additional risk when staking on a pool on Cardano. However, there is a risk involved in staking $ADA or any other token on exchanges. Every time you use your $ADA in exchanges, smart contracts (nft marketplace, yield farming, staking contracts) you are at higher risk. Smart contracts and exchanges can be hacked, your @trezor cannot. Cardano has made a lot of great decisions with its Proof-of-Stake mechanism, but you need real-world data to improve it…”
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