TERM OF THE DAY

ISPO

ISPO stands for Initial Stake Pool Offering. It is a term used in the Cardano blockchain ecosystem to refer to a fundraising model where a new stake pool operator (SPO) can offer a certain amount of their stake in exchange for ADA (Cardano's native cryptocurrency) from investors who want to delegate their ADA to the pool. The idea behind ISPO is to give new SPOs a way to attract delegators and build their stake pools while also raising funds to cover their initial setup and operational costs. In an ISPO, investors who stake their ADA with the new pool operator can receive rewards in the form of the pool's earnings, which are distributed based on the amount of ADA that is staked with the pool. ISPOs are often used as a way to encourage decentralization on the Cardano network by enabling new SPOs to start their own stake pools and compete with larger, more established pools. By allowing small operators to attract delegators and grow their stake, ISPOs can help to create a more diverse and decentralized network, which is considered to be a key feature of the Cardano ecosystem. Overall, ISPOs are an innovative fundraising and staking model that allows new operators to enter the Cardano ecosystem, while also providing incentives for delegators to support new stake pools and contribute to the overall decentralization and security of the network.