Max_epoch

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 should be aware of: ‘max_epoch.’ Cardano stake pools are computer servers operated by individuals and entities around the world as part of a global connected permissionless network. This decentralized network processes transactions for Cardano, forming the Cardano blockchain. 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 an operator desire to retire their server and leave the network, the deposit is returned with a special deregistration transaction which signals the server’s retirement. That request to retire a server will take a minimum of 2 epochs to be processed. But could a retirement be planned and scheduled for farther into the future? Yes! The max_epoch parameter is the maximum number of epochs in the future a pool retirement is permitted to be scheduled in a deregistration transaction.

The current max_epoch length is 18 epochs. 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 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 why is this important? Well, your staked ada is one of the primary mechanisms providing security to the network, and it is the ONLY mechanism that provides staking rewards to your wallet! Letting your ada sit in a defunct pool hurts network security, and costs you money.

The max_epoch parameter creates some predictability around pool retirement. A pool that is retiring will have to “announce it,” via a deregistration transaction. From that moment, their delegators will have between 2-18 epochs to avoid letting their ada sit in a retired pool. A good and responsible pool operator will do whatever they can to communicate with their delegators proactively, give them plenty of warning to move their ada by the given deadline, and perhaps even by recommending some other reputable pools to try. But given the realities of a decentralized ecosystem, an operator may not have a reliable line of communication with all their delegators. Further, the reality of this parameter is that nothing compels a stake pool operator to do anything beyond submitting the deregistration transaction when they want to retire their pool. Like so many things in a self-custodial system, the ultimate responsibility lies with each user. Knowing that your stake pool may retire at any time, and you will probably only have between a few weeks to a few months notice, it means that you can’t just hodl and look the other way while your money accrues rewards.

Fortunately, it’s easy to check and confirm that a given pool is active, or if they have submitted a deregistration transaction. If they have deregistered, that information will show on the pools page in any Cardano explorer, including Pool.pm. You might also be able to see it in the staking tab of your wallet. The information may say “Retired” or “Retiring” and indicate the epoch when a pool retired. If you are trying to figure out what epoch it is now, https://cardanocountdown.com/ has a simple one!

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. Thanks to the max_epoch parameter, we can all know what to look for, and how to avoid that unfortunate situation.