• 13 July, 2024
News

Charles Hoskinson Expresses Disappointment Over Contingent Staking Concept and Misrepresentations

Charles Hoskinson, founder of both Cardano (ADA) and IOG, has expressed his confusion regarding some of the reactions to the concept of contingent staking (CS). 

It’s incredible how polarized some people have become to the extent that they can not understand a basic concept and continue to misrepresent it.Hoskinson expressed in a recent tweet. 

According to Hoskinson, CS does not implement a know-your-customer (KYC) regime on Cardano, nor does it replace normal staking or remove private pools. The marketplace of stake pool operators (SPOs) would still exist, allowing people to delegate to their preferences, including normal stake pools.

However, opponents of CS have not offered a solution for how actors like governments, universities, regulated entities, not-for-profits, and others who could, and sometimes do, run stake pools can do so and stay in compliance with local regulations. Hoskinson questioned whether these groups do not matter to CS opponents.

Hoskinson also noted that opponents of CS do not seem to understand how dangerous an initial stake pool offering (ISPO) can be without entry conditions and contracts prior to receiving customer funds.

Additionally, they want to remove all agency of SPOs, claiming that they are a public good. Hoskinson argued that SPOs are valuable service providers who compete against each other and charge fees for delegation. 

Furthermore, Hoskinson expressed his disappointment that discourse has broken down around CS. He emphasized that tough decisions need to be made about the future, funding, tradeoffs, and roadmap. He urged everyone to reflect on the situation and to engage in a structured, transparent, and fact-based process to debate and converge to decisions.

If governance is going to work for us all, then we need to stop having low information, dramatic, knee-jerk reactions to issues that aren’t even codified in CIPs. Hoskinson writes.

This Tweet thread comes as Hoskinson argued that the SEC was justified in taking action against Kraken over its Staking Program During a live stream broadcast on Feb. 14. He explained that the SEC complaint focused on Kraken’s “protocol deviation” and not staking as such. 

He argued that staking directly on a protocol and staking with Kraken are different things, as the latter introduces further risk. He concluded that the SEC had justified concerns about Kraken’s Staking Program and that the crypto community should not interpret the settlement as a crackdown on staking or an attack on the crypto industry.

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