Cardano: SundaeSwap announces Reverse ISO proposal and here’s what it means
Even as Cardano‘s much-hyped decentralized exchange (DEX) SundaeSwap suffered a patchy launch last month, a resurgence in its popularity has also been marked by an expansion of the protocol’s ecosystem. With its Initial Stake Offering (ISO) coming to an end this week, albeit not in the manner expected, the DEX has now introduced a unique concept of decentralized staking and the community seems overwhelmingly aboard the idea.
SundaeSwap announced earlier today that its Reverse ISO proposal, introduced yesterday, had received an 83% approval, and it will now take place from 19 February to 24 February. The Reverse ISO is a staking mechanism aimed at redistributing ADA within smaller stake pool operators (SPO) that had initially lost delegation. This will enhance decentralization within the Cardano ecosystem, according to SundaeSwap, which has planned to incentivize this process through the allocation of 20 million SUNDAE. It further noted that,
“Participants are rewarded for delegating ADA to Single Pool Operators who received at least one vote in the original ISO/Scooper vote.”
ISO refers to a Cardano-native token distribution model where users delegate their ADA with an approved stake pool and receive the new token in exchange.
In a blog post earlier, SundaeSwap had revealed that while the ISO was aimed at promoting new protocols and rewarding community members through electing SPOs, the response led to a concentration of ADA staking power in the elected SPOs. “That concentration seemed to be running counter to one of the core values of the Cardano network: decentralization,” it added.
“Given the size of our own community, the SundaeSwap ISO diverted a lot of delegation away from smaller pools with individual operators, and started a trend towards, rather than away from, centralization… we have concentrated nearly 7 billion delegated ADA behind 40 different stake pool operators.”
It further mentioned that as part of its efforts to bring back decentralization on the network, the DEX will also be delegating all ADA locked in the escrow contract on the SundaeSwap DEX to smaller single pool operators.
Although sounding alarmed, SundaeSwap has assured its community that Cardano continues to remain “less centralized than nearly all other top blockchains.” However, SundaeSwap’s own troubles seem unending, as the protocol had already been facing criticism over the way its ISO was launched. Many users had complained that the process was complicated and badly communicated, which had led to skepticism over the protocol’s viability. Similar sentiments could be seen floating through the Reserve ISO proposal as well.
so confused. I changed my stake to support the reverse ISO, but my stake won't change wallets until 2/24 and you say it starts on the 19th and ends the 24th….how can anyone get their stake pool swapped by the 19th???
Am I confused or are you?
— LadyKillerLevi (@golfknutnc) February 15, 2022
Nevertheless, SundaeSwap enjoys a 95.5% dominance on Cardano, with the total value locked on the protocol recently breaching the $100 million mark yesterday. Since then, additional growth has led to SundaeSwap’s TVL standing at $123 million at the time of writing.
— Cardano Daily (@cardano_daily) February 8, 2022