INITIAL POOL STAKE OFFERINGS IN CARDANO: IAMX

by THE.ONE.OR₳CLE

This article is a subsection of a larger article “INITIAL POOL STAKE OFFERING IN CARDANO: a critical overview”

Disclaimers

1. This is not financial advice. I have no training whatsoever in the finance sector and I am in no way or capacity a licensed financial advisor.

IAMX

To be fully honest my first impression on the team wasn’t all that good, which was partially my fault for addressing them in a confrontative manner. Nevertheless, I also feel that they didn’t put enough effort in readily answering my questions or dismissing my concerns as other ISPOs teams did. In any case the issue is resolved.

Owing to the utility of its tokens, this project is unique in the way that its total supply scales-up and I had a hard time wrapping my head around it. After a more careful read, I was able to better digest the information in the whitepaper. The team provides ISPO details as “1 token per epoch” (ADA needed to earn one token per epoch) and “Ratio 1 ADA” (calculations per ADA delegated), which is quite useful. However, that same table provides a lot of information that deserves a more detailed breakdown. In my opinion this can only benefit the project. Believe it or not, the team updated the whitepaper during the writing of this section. The information on the rewards is now presented in much more detail.

The ISPO is very rewarding for long term delegators, essentially adding ca. 80% to the rewards after 20 epochs, which is quite generous. Although the baseline rewards increase linearly with the ADA delegated, the bonus rewards only do so for delegations up to 5,000 ADA. For higher delegations the percentage of bonuses increases with the amount delegated. This constitutes a clear incentive to attract large delegations, which may greatly help smaller pools. The tradeoff is unfortunately the centralization of the rewards, often combated in other ISPO’s with whale balancers. The deviation from linearity in the bonus rewards is small, which mitigates its negative side.

The rewards dashboard improved greatly since the start and now shows an epoch breakdown, as well as the stake addresses participating in the ISO, contributing for its transparency. Another positive aspect is that in a highly unusual approach, the rewards are sent to the delegators as they are earned, and I think it would be interesting to see how it reflects on price action to determine if this could be a suitable model, as many ISPO’s are opting for vesting schedules.

Figure 12. Percentage of total supply earned per epoch with 1M ADA staked. The data presented here use 60M for the total supply, which in this case might provide more accurate estimates of the rewards than the 33B total supply. The bonus presented here for 20+ epoch delegations is not entirely accurate, as the bonus depends on the amount staked. However, 80% is a reasonable approximation.

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