April Updates on Community Stacking Pool

Below you find a transcript of the Stacks April Town Hall where I updated on the activities around Friedger Pool:

We see, there are different opportunities for delegated stacking and we created a pool registry smart contract on testnet. It uses BNS names and we would like to get feedback in the corresponding forum post.

There is really a demand for delegated stacking. Friedger Pool started with 1 million delegated stacks within a few days and now we have nearly 5 million delegated stacks and 500 members. To me, this shows that users understood the low risk of delegated stacking compared to the wins. In the first two cycles, we paid out around 1% for 2 weeks stacking, for the next cycle it will be probably more around 0.5%. That is an annual rate of more than 20% for the first cycles, and now around 10%.

The drop in the rate happened when the miner rewards bonus ended a few blocks before the end of cycle #4. Some users were surprised and we could have done better in raising awareness of the drop earlier. Also, some users weren't aware of the cool down cycle. That is the cycle after the locking period where users won't receive rewards.

Another issues that we experienced was that some users transferred stacks to our delegation addresses instead of delegating. In total that was more than 100,000 STX that we returned back to the users. We are learning as the ecosystem evolves and it is great to see very good support by community members who help to answer questions and educate users. At stacks101.com we have compiled a FAQ for delegating stackers.

As a pool operator, we had to learn a lot as well. There was little documentation and the only source was the POX smart contract. We learnt that transaction size could be a problem for the network. In the first cycle, we committed in the very last block before the start of the next cycle. That was stressful. And some pool operators didn't succeed. By now, we prepared some open source tools and developed scripts to automate the process. But we are still early.

Boomboxes are the next step. Within the Boom app, everything for delegated stacking is managed through a smart contract. Only the payout is a manual process. We will see how this can be done through some DeFi protocols in the future.

This requires a secure Stacks Wallet and ideally a solution for mobile. Boomboxes can't be created by mobile users at the moment without niche browser and security warnings. I am exited to see what we can create once we have an authenticator on mobile.

Apart from the technical side, pool operators have to decide on fees they are taking. I find it not very fair that the small fish have to pay for a service that the whales get for free. Another point is that stacking for longer periods is rewarded more than for shorter one while shorter stacking helps the network more. Hopefully, this will be addressed in Stacks 2.1. Keyword here is "Continuous Stacking". In general, I hope, that the value of Stacking is communicated more and that it is not reduced to optimizing the annual yield rate.

This is my update about running Friedger Pool.