Fully decentralizing Cardano is the network’s primary objective. But considering all of the factors in play, achieving this is no mean feat.
Developers IOHK must take into account things like security, performance, stability, sustainability, and incentivization. Otherwise, the consequences of ill timing could be disastrous for the network.
There are 20 parameters that control how Shelley operates. The one most people are familiar with is the “D” parameter. This refers to the ratio of blocks produced by IOHK versus independent stake pool operators (SPOs).
Over time, by gradually handing more block production to independent SPOs, IOHK expects a 0 “D” parameter by March 2021, meaning SPOs will mint 100% of the blocks on that date.
But equally significant to the network dynamics is the “K” parameter, which refers to a saturation equilibrium value.
In short, the “K” parameter ensures big pools will receive diminishing rewards past a certain level of saturation. The thinking behind the concept incentivizes stakers to