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Cardano (ADA) Ecosystem Might Benefit From This New Move: Details

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Mon, 30/10/2023 - 17:05
Cardano (ADA) Ecosystem Might Benefit From This New Move: Details
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The Cardano ecosystem might stand to benefit from this new move by the Cardano Foundation.

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On Cardano's proof-of-stake (PoS) protocol, Ouroboros, delegators and stake pool operators (SPOs) receive rewards as they contribute to securing the network.

One of the unique features of the Cardano blockchain is that staked ADA remains in user wallets, allowing transfers to other wallets at any moment.

While this functionality has advantages, it also poses difficulties in implementing reward calculations. This mandates the use of snapshots for reward calculation, according to the ledger specification.

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The calculation for new reserves, fees, the total rewards pot and the Treasury begins the procedure. Following that, pool rewards are calculated depending on the total reward pot. The pool rewards are used to compute rewards for stake pool delegators and stake pool operators.

The code is executed using a slot-based scheduler, which might be difficult to read and understand for people unfamiliar with the source.  While various optimizations have been implemented to improve calculation performance, these optimizations can make the code more difficult to understand.

Cardano Foundation releases open-source rewards calculation

Bearing this in mind and as part of efforts toward the operational resilience of the network, the Cardano Foundation says it has open-sourced a node-independent reward calculation.

The project's goal is to develop a method for performing and validating reward calculations that is not dependent on a particular implementation. It also intends to give detailed documentation on Cardano's treasury, reserves and pool rewards.

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As an open-source repository under the MIT license, the endeavor strengthens the foundation's commitment to open-source maturity and seeks contributions from the broader ecosystem.

Finally, the calculation can be used as a teaching tool, thereby increasing transparency and operational resilience.

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