Today we are announcing the addition of a great new feature – Stake Pool Voting! From the beginning of the project we have talked about our desire to provide true decentralization and the vote on the stake pool is a crucial step in that journey.
Stake pool voting is now live. Once live, all liquidity providers can vote on where the pools they hold their liquidity in will deploy their ADA.
Voting on stake pools puts power back in the hands of platform users. It allows anyone holding liquidity provider tokens to have a say in which stake pool grants them rewards. Users can choose from a wide list of pools and thus influence which pool their ADA is staked into. We do not support voting for pools with an initial stake pool offer as this would result in the loss of stake rewards.
To determine where the ADA will be deployed, each pool holds a simple vote. To be considered successful, at least 25% of the votes (equivalent to 25% of all Liquidity Provider Tokens issued within the pool) must be cast. If the votes are not cast, the ADA defaults to reverting to the current pool in which it is deployed.
All liquidity pools containing ADA are eligible to vote. When a user provides liquidity in a pool, they are entitled to vote on where the ADA included in the liquidity pool should be delegated. Users just have to choose their preferred pool.
Users use their right to vote to vote. The voting right is the minimum of deposited liquidity provider tokens in a given epoch.
What does that mean in practice? Suppose you pledge 100 liquidity provider tokens for voting in the middle of epoch 335. Your minimum pledged LP tokens in epoch 335 is 0, so you have no voting rights in this epoch. If you keep your 100 deposited LP tokens, your minimum deposited LP tokens in epoch 336 is 100, which means your voting right in epoch 336 is 100 and you have the ability to change where the ADA from the liquidity pool is delegated .
If the user already has some escrowed liquidity provider tokens in a farm for at least an entire epoch, they could use their power to participate in the current epoch vote. Creating votes does not change the deposit itself, it just gets a different function.
A liquidity provider can manage its voting rights at any time, but it is important to remember that removing votes will affect voting in the current epoch, while adding new votes will affect the subsequent epoch, as this is the epoch in which the added ones Tokens are deposited for the first time for the entire 5-day length.
Imagine that 100 LP tokens are issued spread across 4 liquidity providers:
- User A has 32 LP tokens deposited for Stake Pool X
- User B has 18 deposited LP tokens for Stake Pool Y
- User C has 20 LP tokens deposited for Stake Pool Y
- User D has 30 votes but has not voted
These liquidity providers receive one vote for each LP token (1 ballot = 1 LP token). We assume that users have made their educated decision to support one stake pool or another by voting in the relevant part of the UI. We also assume that users A, B, and C had deposited their LP tokens for the entire duration of the epoch.
User A has the most liquidity and 32 votes, but User B and User C, who vote for Pool Y, have a total of 38 votes. More than user A
At least 25% of all issued LP tokens must vote for a given liquidity pool. For the example above, the turnout is 70%, so the vote is valid. As a result, the chosen pool for the next epoch will be pool Y. The staking agent ensures that the voting results are taken into account and delegates the liquidity pool to the chosen stake pool.
Check out our previous youtube video about staking out HERE.
As always, the WingRiders team is building out more features and elements of decentralization for the WingRiders platform. Please don’t hesitate to give us feedback through the appropriate channels in Discord.
Peace.
The WingRiders team
Original source: https://medium.com/@wingriderscom/stake-pool-voting-17d39e38a282
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