SundaeSwap wants to promote further decentralization on Cardano via its “reverse ISO proposal.” But what exactly is a “reverse ISO?”
SundaeSwap is looking to keep the ISO party going
After much hype, SundaeSwap launched on January 20 and soon became the leading Cardano dex. Currently, it has a dominance of 97%.
However, on launch, SundaeSwap quickly came under fire for its buggy unusable protocol. A disagreement with partner Cardstarter has since exploded into legal action as well.
In addition, its Initial Stake Pool Offering (ISO) has also been slammed as poorly conceived, with some users saying the claim process is overly complex and was badly communicated.
The SundaeSwap ISO is a token distribution method that sees 5% of the total supply (equating to 100 million $SUNDAE tokens) given to participants who staked their ADA tokens with any of the 30 official scoopers.
It comes to an end on February 14, having lasted for five epochs since going live on January 25.
Despite that, and perhaps in a bid to win over critics, SundaeSwap is looking to give away more $SUNDAE tokens in what it calls the “reverse ISO.”
In the original ISO, 30 official scoopers were nominated as the “interface” with which to claim $SUNDAE tokens. These were decided upon by community votes and were generally already large Cardano staking pools.
During this event, official scoopers benefited by vast inflows of ADA at the expense of other staking pools. The SundaeSwap team observed this effect as a trend towards centralization.
“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.”
To counter this and foster greater decentralization, SundaeSwap proposed another ISO. But this time, giving smaller stake pools a shot at being the “interface.”
The community says yes
After some back and forth, SundaeSwap has now settled on giving away 20 million $SUNDAE tokens over one epoch running from February 19 to 24.
To receive rewards, stake ADA with an eligible pool operator for the duration of the epoch. SundaeSwap says eligible pool operators are any pool operators that received at least one vote in the initial ISO scooper selection vote.
The team decided to put the proposal to a vote; the results are available here. A relatively small number of voters (just 3,963) approved the proposal, raising questions on the short running time between the reverse ISO announcement and the poll closing.
Nonetheless, the reverse ISO should go some way towards redistributing ADA to smaller pools.
Featuring a summary of the most important daily stories in the world of crypto, DeFi, NFTs and more.
Get an edge on the cryptoasset market
Access more crypto insights and context in every article as a paid member of CryptoSlate Edge.
Join now for $19/month Explore all benefits