Cardano’s founder Charles Hoskinson has stated he will eat a shoe made of cake because that’s what he said he will do if the Proof of Stake (PoS) upgrade, called Shelly, does not go out this year.
“I made a statement repeatedly that should Shelly not ship this year, I will eat my shoe,” Hoskinson said in a Twitter broadcast.
He then later claimed Shelly is actually launching this year, but as a compromise he will eat a shoe, made of cake.
“I consider the incentivized testnet to be launching Shelley. I understand some trolls want to FUD or claim a missed deadline, but this is literally exactly what Shelley is intended to do -> start decentralizing Cardano, stake pools and rewards,” he said.
In the video he claimed that launching just a testnet is not good enough because he thought there was no reason for people to build staking pools and so on and because “we want to test the game theory.”
So they’re launching what they call an incentivized testnet. We’ve never heard of such a thing before and it does sound like a contradiction in terms because in this “testnet” real Cardano tokens (ADA) will be earned.
Snapy Snap Cardano Upgrade
As you may know Cardano is currently completely centralized with just the Cardano Foundation running the nodes, as well as Hoskinson’s company.
So apparently what they plan to do is take a snapshot of all the addresses and balances, include these in the testnet, have people stake and the rest, then take a snapshot of the earnings, and then…
Well, presumably print the ADA on the mainnet since this is pretty much a database right now so they can do whatever they want, with that newly printed ADA so being the testnet staking earnings.
A testnet, as you might know, is kind of running the network, but in lab conditions to test everything and see if it all works well, avoid any bugs, check things like whether someone can print out stake tokens, can hack or cheat in some way.
Hence the testnet tokens usually have no value whatever because you want to play around, so if they’re lost or whatever it doesn’t matter.
Here, however, they’re kind of not really testnet tokens, they’re actual ADA, or at least that’s the suggestion. There hasn’t been a documented spelling out of what exactly they plan yet.
Two Years For Stake
The launch of Proof of Stake – which is really the launch of the network as right now this is just a database controlled by Hoskinson who can probably do whatever he wants – was promised for the first quarter of 2018, and then first quarter of 2019, and now first quarter of 2020.
The testnet is going out, however, with the design here seemingly more focused on incentivizing staking pools.
“For maximal efficiency and security, a solid majority of stake (about 80%) should be delegated to a number of stake pools (about 100 seems to be a reasonable number),” they say.
Meaning this is kind of Delegated Proof of Stake (dPoS) rather than actual Proof of Stake like in ethereum.
In eth, the design is geared towards you yourself staking with subtle or implicit incentives for you to not use pools or anything like that unless you really have to.
That’s because of how punishments work in eth staking whereby the more people misbehave intentionally or otherwise, the more each participant is punished.
So if you are using Windows and there’s some specific Windows bug that affects all other stakers using Windows, you might lose your entire stake. While if you’re on some obscure – but secure – Linux OS and there’s a bug that affects staking, but you’re the only one using that OS, you might not be punished at all, or maybe a tiny little bit.
Because going with the herd can hurt in eth, people are sort of being pushed away from pools and given reason to set up their own system.
While in Cardano it looks like people are being pushed towards pools, making it far less decentralized.
The $30 Billion Shoe
Cardano raised an incredible 108,844.5 bitcoins in total in an ICO in 2017. That’s now worth about a billion dollars.
At the time we were told “voting” would go out next year, that being in 2018, but that didn’t quite happen.
Ethereum too was meant to have staking out last year, but ditched it at the last minute. Staking will now go out in or around January with a brand new blockchain to be launched. Meaning Cardano has sort of followed eth.
Back in 2017 we were also told Hoskinson’s contract runs out in 2020, so next year.
It’s not clear how much he or his company was paid for two years of promising to eat shoes, but the Cardano foundation must be very rich presuming they still have 100,000 bitcoins.
Cardano holders, however, are very poor with some $29 billion worth of paper value wiped out.
From $30 billion to $1 billion is one of the greatest loss in the crypto space. It is double the loss of Tron which too went from some $16 billion to just under $1 billion.
That’s a 97% fall for Cardano, with it quite unclear just what this project has been doing for two years since the December peak when Hoskinson sold some of his crypto.
You’d think there would be smart contracts by now and kind of everything, but there’s actually nothing save for a database run by Hoskinson.
A database that’s not even used by anyone, just 1,000 transactions a day or so. With it to be decentralized a bit more into those 100 pools or however many there will actually be, but there’s nothing you can do on this network for now as there’s no smart contracts or anything.
At the time we were told this was going to be a generation 3 blockchain, but as it happened it’s not even a 0.1 yet as it’s just a database run by Hoskinson.
Now the idea was there would be this simple settlement layer, and then you’d have smart contracts in some other layer somehow.
How long that will take remains to be seen. And then they were going to have sharding too, but with this “incentivized testnet” we’re starting to think they might just copy ethereum and its eWASM and all the rest.
We suspect so because Hoskinson is now plenty rich with it unclear whether he has any capable coders so he might just throw a bone by copy pasting after eating his shoe.