Decentralizing Tezos Delegation Services

Bakepool FAQ

What is the Bakepool Project?

Bakepool is an open-source contribution to the Tezos community sponsored by Wealthchain, Inc. and built by passionate members of the Tezos community. 

Bakepool enables Tezos bakers (independent node operators) to form collectives of bakers (or 'pools'), to process delegates as a united enterprise. This gives bakers scalability in capacity, as well as scaled (and represented) bargaining power with other actors in the ecosystem. 

Current 'large bakers' can leverage their unique brand presence's, respectively, to transition from being single-bakers to becoming become Bakepool Managers — increasing their own capacity while equitably helping small-bakers compete in the free-market.

Bakepools can be configured as public or private, for either commercial or non-commercial purposes. Each bakepool can design its own standards.

What is a 'bakepool'?

A bakepool is a self-organized sovereign Tezos Baking Delegation Service that consists of multiple bakers (full-fledged nodes; you must be an independent baking node to join a bakepool) effectively 'pooling' together their capacities, enabling massively increased scalability and dramatically reduced actuarial risk. This is the turning point that will make it possible for the average Tezos Baker to compete on an institutional-scale while providing other benefits. Delegators delegate to just one delegation address, 

Unlike the current dominant Tezos Delegation Service model, in which a single baker, is responsible for their entire end-to-end supply chain supply-chain — which included not only technical implementation, but also: marketing, customer service, administrative support, payout oversight, and governance management — bakepools operate as independent 'bands' of bakers and can share task responsibilities not only to spread the load but also to find the optimal actors for each task, respectively.

How are bakepools formed?

Bakepools are operated through smart-contracts: a bakepool smart-contract. The person who originates the bakepool smart-contract is the Bakepool Captain (or just called the 'Captain'), who operates as curator.  The Bakepool Captain starts the smart-contract by adding one baker as what's called a Partner Baker, and thereafter is responsible for adding or removing other bakers to their pool, so long as the bakers accept (i.e. confirm signature). 

Unlike other so-called 'pools' on other blockchains, which effectively crowdsource resources from multiple participants to support a single nodes, to be a partner baker of a bakepool, one must have a full-fledged independent baking node first. Otherwise, the system would reduce the number of active nodes in the network, instead increasing it — which is one of bakepool's mission goals.  Thus, the bakepool project will show the entire blockchain community how pooling can be done right!

How is delegated Tez (XTZ) distributed to the bakers of a bakepool?

Although the smart-contract is open-source and the sub-delegation mechanism can be customized in whatever programmable scheme the bakepool manager desires, the bakepool smart-contract executes delegations by means of a combinatorial assignment engine, by default.

The combinatorial assignment engine attempts to distribute the XTZ to the bakers as evenly as possible, as well as to include the highest number of participants.  The engine distributes with the greatest common denominator across all participants with capacity. For example, if 1 baker in a pool of 10 bakers has just 1 XTZ capacity remaining and the rest have capacity for thousands more XTZ, and an order is delegated to the pool for 10000 XTZ, then the assignment engine will first assign 1 XTZ to each baker, even if the engine's next act (after that 1 baker is full) is to distribute 1000 XTZ to each remaining baker, so on and so forth. 

How do I start a bakepool?

Start a bakepool by originating the bakepool smart-contract through your Tezos wallet. You (i.e. your wallet address) inherits the role of Bakepool Manager and you can begin adding other bakers. The Bakepool starts with one baker in the origination, who signs with their key, a confirmation of agreement to be a member of the Bakepool Member. The bakepool manager can revoke the membership of this member without cancelling the Bakepool, so long as there is another Bakepool Member signed to the bakepool.

How are fees set and distributed?

As a Bakepool Captain, you will not only curate the membership, but also set and update the fee structure for both in-network bakers and for the bakepool itself.  The captain must thus make these terms competitive in order to attract bakers.  For some captains, that could mean a good strategy would be to offer high-baker rewards and a modest return given to the bakepool itself. Others, may propose that with more of a network income, the bakepool network can have a larger budget — it could provide better and better services for its partner bakers.

A sample example model of distribution would be: 
• 5% to Bakers 
• 5% to the Bakepool 
• 5% to the Affiliate (exchanges, custodians)

What about voting?

Each bakepool Captain will decide how he or she will handle voting rights and this will be publicly disclosed to bakers and delegators as they do their research. How a bakepool chooses to orient its voting will even become a competitive trait of bakepools. It will be fascinating to watch. 

Here are some hypothetical examples: 
• One bakepool could pass voting rights on to Partner Bakers because that’s what their constituency of Partner Bakers desires 
• Another bakepool could be aligned with a particular governance ideology with regard to voting decisions and the Captain will vote for the entire pool as a representative of those interests 
• Yet another bakepool could be completely agnostic and maintain voting rights for the delegators themselves. In fact, they could attract delegators on that basis alone

Search Bakepools (coming soon)

Sort by Name KYC Requirements Baking Capacity Minimum
1 Bakeshop.io (demo/test bakepool) KYC for bakers and delegates 100,000 XTZ
2 Bake.network (example) KYC for bakers only 5,000 XTZ
3 TacoPool (example) No KYC 100 XTZ
4 ClubTezos.com (example) No KYC No minimum

These are just 2 different columns that contribute to bakepool taxonomy. Many other factors can be analyzed by bakers when joining and delegates when choosing, such as: langauge, nation, regulatory consistancy, governance ideology, market approach, other benefits to bakers

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Bakepool is an open-source Tezos ecosystem project created by Michelson.org and developed by devoted members of the Tezos community

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© 2019 Bakepool.org | an open-source ecosystem project from Michelson.org, sponsored by Wealthchain, Inc (Wealthchain.io) and friends