11 Jul 2022 · 3 min read

Ardana’s ISPO Multiplier-Fest Arrives To Incentivize Decentralization On Cardano

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Cardano’s stablecoin hub Ardana’s unique Initial Stake Pool Offering finally got off the ground this week, giving supporters of the Ardana Stake Pool Alliance a nice opportunity to rack up some beefy bonus multipliers on their earnings rewards. 

You may already be familiar with Ardana’s ASPA stake pools, which are responsible for processing transactions on the Cardano network, helping it to maintain its long-term viability and security. Stake Pools provide a way for the Cardano community to participate in the running of the network while earning rewards, without needing to host a node. 

With Ardana’s stake pools, users can delegate their ADA to a specific project and receive the tokens of that project as rewards. This is different from an traditional ICO, where investors essentially purchase the project’s native tokens up front. Instead of spending their ADA tokens, they stake them and earn rewards - while keeping their original tokens. In this way the only risk for investors is that they might lose their rewards. They’ll get their ADA back once the staking period is up. At the same time, they still get early access to the native token of the projects they back. 

However, Ardana has said before that it is becoming worried by the consolidation of staked ADA in a limited number of stake pool operators that run multiple pools. This could lead to the network becoming less decentralized, which is a big no-no for any blockchain worth its salt. As a result, Ardana has come up with the ISPO to provide more incentives to smaller stake pools. 

The idea with ISPOs is to reward long-term backers of ASPA stake pools with bonus multipliers - meaning that the longer they stake their ADA, the more rewards they’ll get. 

Ardana’s ISPO runs from July 4 until January 5 next year, and takes place across a number of “epochs”, with rewards claimable after each one concludes. DANA tokens will be distributed at the end of each epoch via Drip Dropz.

The good news for those who staked in the ISPO before March 31 is that they’ll benefit from an “early bonus staking multiplier” that promises to significantly boost their rewards, Ardana said. They’ll earn a share of 2.5 million DANA set aside as rewards, with a maximum cap of 69,444 DANA per epoch. 

The bonus multiplier starts at x1 (meaning no multiplier for the first epoch) and increases by 0.05x with each epoch that passes, until it hits a maximum of 2x. So delegates will enjoy an exponential increase in their rewards for each epoch. 

Ardana spelled it out in a blog post: 

“A participant decides to delegate on April 29th and remains delegated until the ISPO kicks off on July 4th. They will then have earned 14 epochs x 0.05x = 0.70x bonus multiplier. When the ISPO starts, they will earn DANA tokens with a generous multiplier of 1.70x. Remember, delegating before March 31st grants participants a 2x bonus multiplier.”

Ardana explained that participants must delegate before each new “snapshot date”, which marks the beginning of a new epoch, to take advantage of the multiplier effect. Those who unstake at any time will reset their bonus multiplier back to x1. 

There will also be a “standard staking multiplier” to mark the official launch date of the Ardana ISPO. This will increase by 0.01x starting July 4 and run until the last epoch of the year on December 31. 

Finally, Ardana said it’s applying a “small pool multiplier” to each Stake Pool that has less than 5 million ADS staked, as part of its incentive to boost decentralization. This is a one-off 0.1x multiplier that applies to any new delegate who stakes within one of the smaller pools, though there’s a requirement that the delegate must still remain in that pool until now. Once all of the Stake Pools within ASPA grow to more than 5 million ADA staked, Ardana said it will raise the bar to 10 million and offer a new multiplier for each pool that remains below that number. In this way, it will continue providing incentives to stake in lower volume pools.