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Enterprise addresses

Enterprise addresses carry no stake rights, so using these addresses means that you are opting out of participation in the proof-of-stake protocol.

Exchanges or other organizations that control large amounts of ada – but hold it on behalf of other users – may wish to follow a policy of not exercising stake rights. By using enterprise addresses, exchanges can demonstrate that they follow this policy. Since enterprise addresses are not associated with any staking key, they are automatically excluded from the mechanisms that influence the slot leadership schedule. Note that using addresses with no stake rights effectively decreases the total amount of stake, which plays into the hands of a potential adversary.

Source: https://docs.cardano.org/core-concepts/cardano-addresses#gatsby-focus-wrapper

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From a tax point of view, in many countries you have to report staking and trading differently (DYOR). An exchange therefore does not have the right to stake users' coins without their consent. However, Binance offers a wide range of staking offers to their clients (including ADA staking) and it is only when the user subscribes to an ADA staking offer that the exchange stakes the ADA. With millions of users and millions of ADA, creating your own staking pools becomes a very profitable business for the exchange. But staking your ADA on an exchange does not help secure Cardano, it is better to choose small independent pools to help the network with decentralization. By sending your ADA to a wallet like Daedalus or Yoroi, you can choose the pool to which you delegate your ADA.

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It's their ADA, they can do what they want. This is why you should never stake your ADA with an exchange, no matter the return because, they lock your ADA for a time period and it doesn't help secure the Cardano network. Always stake with SPOs.

I stake with https://airadapool.com/ AADA because they belong to the Tech school, CareerDevs, I joined in 2016. They were the point in my life where someone sat me down and explained crypto. I've been in crypto since and that's why I stake with them and won't move till they are over 1M ADA.

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  • Yes, I have no doubt...I am asking if exchanges can run a stake pool "entreprise address" should not allow them
    – LiberLion
    Commented Aug 29, 2021 at 17:27
  • Its an open system, they can do what they want.
    – jnprogrammer
    Commented Aug 29, 2021 at 17:53
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Because it is profitable for them to do so. If they run 62 pools, they get approximately 32M * 62 * 0.05% a year, which is approximately 96M ADA. They would only change their mind if it was bad for their image, but as people still stake with them, there is no reason for them to stop.

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