INITIAL POOL STAKE OFFERINGS IN CARDANO: Metadex
This article is a subsection of a larger article “INITIAL POOL STAKE OFFERING IN CARDANO: a critical overview”
- 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.
Metadex — reviewed by bobthebob
Metadex is a free ISPO, that for a long time had a very low variable fee (1%) and that was only recently raised to 5%. Like many other aspects in the project, this change was subject to vote by the delegators of the ISPO, which are currently helping to shape the scheme for the vesting of the ISPO’s rewards, as well as the private sale to delegators and the public sale. Even though most projects seem to incorporate the feedback from their delegators, the governance that I am observing in Metadex seems to be on a different level.
Rebranding of the DEX brought minor changes in the tokenomics that will affect reward rates in a positive way. The extensions of the ISPO are great for accumulation, especially if one got late to the party. But because the percentage of total supply allocated (now 7%) is distributed evenly per epoch, it means that every time the ISPO is extended, the rewards per epoch decrease proportionally. Frustrating, but I believe the team made the right choice, as in absolute numbers the tokens are clearly moving from the first 5–6 epochs (Fig. 3), which enjoyed reward rates up to 16x (E277) greater than the average for most of the ISPO (E287 to E 307). Additionally, it was known that the ISPO would last until launch, which has been postponed like everything else in Cardano and for the same reasons. The alternatives would be to either drastically change the tokenomics to allocate more tokens to the ISPO, or to heavily penalize delegators staking in more recent epochs to honor previous reward estimates.
I have not participated in this ISPO from the start, but it was surprisingly easy to obtain the values for the reward ratios shown below. That attests for the quality of the dashboard, even if it has been down for a while. All relevant information is easy to retrieve, and it provides a breakdown per epoch. Furthermore, delegators can find a detailed explanation on how the variable reward rates are calculated.
It took over six months of closely following ISPO’s to put this together and ultimately for the benefit of the whole Cardano community. Please contribute.