Few Delegation Services


#1

Right now 2-3 delegation services are being promoted. Is there a list of more somewhere?

Prior to the main launch, it seems hundreds of delegation services would be ideal. Not sure how many people will self-delegate, but what if it is a low % of holders? To start, it appears most baking will be in the hands of a few.

What is preventing new delegation services from starting? It’s either too costly or time-consuming to start a node, or the 10% bond is too strict, or the rewards too low.

IMO, the risk/reward is not great for delegation services. On this previous post, Tezzigator put forward the rate of return that a service could expect to earn on capital, which is 8-9% annually:

It’s hard to get excited about a 9% annual return when many of the ICO’s / crypto we all have been a part of have gained 10x-30x returns. As a delegation service, I would be required to allocate a large amount of capital (that cannot be liquidated as long as I run the service), to a high-risk venture. High-risk because Tezos does not have utility yet.

With the expected variance in Tezos prices, the value changes in my posted bond will be high. In order to get paid for that, a delegation service should earn 25-30% annual returns on capital. A business with a maximum 9% gross margin is uninteresting to own.

Why not increase the dilution from Tezzie holders that do nothing to > 5%? Make it 20% or more. Do this and hundreds of delegation services and long-term Tezos holders will come out of the woodwork.


#2

@murbard wrote a great piece on the delegation choices at launch here: https://medium.com/@arthurb/delegation-upon-launch-e864b6489b9f

Ultimately, with mainnet success we will see smart contract usage grow, and with it baking / delegation services.