Cardano has around 30 network parameters. Parameters are the mechanisms that control how the Cardano Blockchain works.
Today we are talking about a parameter that every Ada holder needs to be aware of. Our parameter today is the ‘max_epoch.’
Stake pools are servers operated by individuals and entities around the world as part of a global connected permissionless network. The network is used for running many computer related tasks, including processing transactions for Cardano. It is permissionless because anyone can set up a server and join their server to the network. An ada deposit, specified by the pool_deposit parameter is required to join the network. Should you desire to retire your server and leave the network, the deposit can be returned with a special deregistration transaction to signal your server’s retirement. Your request to retire your server will take at least 2 epochs to be processed. The max_epoch parameter is the maximum number of epochs in the future a pool retirement is permitted to be scheduled for.
The current max_epoch length is 18 epochs. This means that if your favorite pool is shutting down their servers, you will have at least 18 epochs from their signaling to move your stake. Given that the current value of epoch_length is 5 days, 18 epochs is 90 days.
At first glance, max_epoch may appear to be one of the less interesting parameters, until you consider all the interesting ways ada holders may manage their staked ada. Large ada holders sometimes use complex passphrase management schemes like Shamir’s–a method to break up and distribute secrets either among a group, or between distant geographical locations. Other times ada and associated stake may be time-locked in a smart contract, often for 30 to 90 days. Long-term ada hodlers may check the status of their pool only rarely.
So awareness of the max-epoch parameter is important, because it is what creates some predictability around pool retirement. Ada staked to a retired pool is not rewarded and does not contribute to Cardano’s security functionality. Ada holders don’t want to lose rewards, and the network doesn’t want to lose security. So, the predictability created by the max-epoch parameter means there’s a lower chance that ada will be delegated to retired pools - if ada holders are aware of it.