The SundaeSwap ISO — It’s not a Popularity Vote
SundaeSwap is a native, scalable decentralised exchange and automated liquidity provision protocol that’s built on the Cardano network. Once it is released, it will be one of the first Cardano decentralised exchanges and will show the entire community just what Cardano is capable of.
While SundaeSwap is close to being release, there are still some aspects that they need to implement before it is ready. The current technical problem is that Cardano is still working on its scalable solution called Hydra. Until Hydra is release, Cardano has a theoretical limit of 250 transactions per second, which is not enough for a decentralised exchange.
To solve this problem, SundaeSwap has decided to create a hybrid system they call “Scoopers”. Putting it simply, they will pass the transactions off to a select number of Stake Pool Operators to aggregate the transactions before putting them onto the blockchain. Since the task of aggregating these transactions requires a certain level of trust, they have decided to open up the SPO selection process to the public to vote on.
This in itself brings a few challenges, namely that it comes down to a popularity vote. Since there will only be 30 SPOs chosen, there’s a good chance that the bulk of the SPOs chosen will be YouTube / Podcast personalities.
The question is then raised, does being a popular YouTuber qualify as someone who has the technical skills, resources, time, and reliability to be given such a responsible task? That will be up to the voters to decide. There are many Cardano personalities that have or had jobs in I.T, but there are also YouTubers who are running Stake Pools who haven’t been maintaining their servers and have lost their delegators hundreds of thousands of dollars in rewards.
I’m sure there will be voters who will simply vote for the Stake Pool they are currently delegating to, which is perfectly fine. If SundaeSwap really was concerned about the stability of their platform, they would be going through a stronger vetting process.
Some things to consider though, because processing transactions for a decentralised exchange will not be the same as running a Cardano pool. While it is relatively simple to follow a Cardano Pool tutorial and be up and running without a few hours, that doesn’t mean that’s the end of it. As an example, one good way to determine if a pool is being managed correctly is whether it is secure. A sign that a pool is not secure is whether they have the default SSH port 22 open to the public. Port 22 is used for general server maintenance and is typically the first thing a hacker will attempt to break into if it is publicly accessible. It is therefore highly recommended to keep port 22 closed off to only trusted IP addresses.
As part of ADATools.io, we check if a pool is online or not. Since keeping port 22 on a server closed is vital, we decided to add a port scan. At the time of writing, we detected 799 relay servers had port 22 exposed, while only 349 had it closed. We still have another 3440 relays to scan, but it proves the point that there are a large number of SPOs that don’t understand basic server security. You can use ADATools.io to check if your SPO has secured their pool relays or not https://adatools.io/pools
Since processing SundaeSwap transactions is so vital and it comes down to your votes, please really consider whether your chosen SPO is really up for the job. It’s one thing for them to say they need votes, but have they proven they can run vital Cardano infrastructure? E.g, do they run Cardano products or services such as IPFS nodes, NFT auctions, dashboard / insights, or participate in the testnet?
While voting for an SPO is entirely up to you, please do consider the best SPO for the job, not because you’re doing them a favour.