IOHK plans to increase the parameter k to improve the rewards for ADA holders
ADA price rose by more than 8% last week to fully compensate for the losses of two weeks ago
A large bear pennant chart formation, now in the making, is activated with a break below $0.0850
The Cardano (ADA) price is trading moderately in the red this week as the price movement consolidates after last week’s gains of nearly 8.5%.
Fundamental analysis: Cardano decentralization underway
Tim Harrison, the IOHK’s Director of Marketing and Communications, has published a roadmap that contains decisive steps on the way to Cardano’s decentralization. The ecosystem is moving towards two major milestones, including the introduction of decentralized funding and the transition to a fully decentralized network.
The introduction of Catalyst and the continuous reduction of d-parameters are the two factors driving the platform towards Cardano’s final phase, Voltaire. On the other hand, Harrison discussed another factor that should benefit the long-term ADA owners.
IOHK plans to increase the k parameter to improve the reward for deployment. When Shelley was introduced, the parameter k was 150, limiting the pool size to approximately 210 MM Ada. The IOHK team has been closely monitoring the activities in the network over the past months and came to the decision to increase the parameter k.
However, Harrison emphasized that adjusting the parameter k requires active user involvement. Therefore, he said, users who stake out need to actively participate and select new pools to stake out their ADA holdings.
“We plan to implement the change to k in stages. First, we will move to epoch 234 (21:44 UTC Sunday, December 6, 2020) at k=500. The transition to k=500 will provide a better opportunity for small to medium-sized pools that are currently in difficulty to attract delegations. In addition, the pool size will be limited to ADA 64 million, which means that over 100 of the largest pools will be saturated. You can always redeploy between now and the changeover,” he said.
Technical analysis: A pennant with a big bear in the making
A large number of old coins made progress last week after Bitcoin managed to pass the $12,000 mark. The ADA price rose by over 8%, fully offsetting the losses of two weeks ago.
ADA/USD Daily Chart (TradingView)
What is worrying for ADA buyers, however, is that the price action is now forming a big bear pennant, which is a bear market that is expected to prolong the downward trend. This pattern will activate with a break below $0.0850. In this case, the target becomes the playground, centered around the $0.030 mark.
IOHK plans to increase the parameter k, thereby increasing the rewards for ADA holders and strengthening decentralization. On the market side, the ADA threatens to collapse in connection with the developing bear pennant.