Cardano as part of the globalization process and governance period coming up - We need much more research

So Cardano has made its roots and is starting to grow. First of all then I want to congratulate Cardano with its 2 year anniversary. We do however not as in nature have a resilience of a genko tree or a natural path to take in this growth. That must come from the organism itself - us - the community.

A long term trend in the world once technology made it possible was that of globalization. This is why we have the UN, the EU, or even the UNITED states of America. Once people where more effectively able to communicate and travel to each other we formed bigger and bigger tribes. We are still struggeling with the effects of these changes as it creates pressures and turmoil (refugee crisis, national job losses etc) however few would argue you could ever shut down this process once it has started. China already tried building walls and it became a tourist attraction attracting many visitors (quite ironic if you ask me). It will likely be the same for trying to wall off economies or wall of communications. It simply does not last long and time will wear down any such blockades. Longer term I wish there was research into minimal political forces of Cardano. With that I mean universal rules that users all across the globe would be likely and find useful to adopt.

The main question in my mind is how do we as a global community embrace the possibilities this gives and lessen any burdon it carries to any individual. Given the capabilities of Cardano to actually form communication, economical movements and even flow of information in smart contracts there is a clear potential for both a political, legal and governmental side of the system.

I think it is critical now that only the roots of Cardano has been set that we let it nourish in a strong way. So a very first step in this direction is to look at the voting process. Voting is the easy part but how to get to someone to vote and how we follow through with the voting is the hard part: (yes that is from Charles speech as well) some examples I can come up with now while typing this:

  • Will we exclude many good ideas if it becomes a “winner or winners takes it all” type of system? (my opinion we need a trickle down type of system where even lesser ideas have a chance but albeit at much less resource spending)
  • How to enact the proposals and even enforce them? (my opinion only economical enaction is currently realistic, but in future we can have more advance legal contracts)
    -How will costs accumulated by a project be tracked in a verifiable way by the treasury? (my opinion this is critical given that only economical enaction is currently realistic)
  • Will the system guide the proposal process and if so how? (My opinion we need communication built into the treasury and it should allow users to vote and adapt templates for propsal submitting processes)
  • How will identities and responsabilities be established? (my opinion is that Cardano Foundation or some oversee board needs to have a helping / guiding hand during the initial part of the treasury voting process to establish who the submitters of proposals are and act as an objective intermediate. Since the system itself only can enact economical responsabilities the CF needs to enact legal responsabilities and perhaps even help and facilitate in legal aid when needed both for the proposal voters but also to be able to seek compensation on behalf of the treasury in case of fraud).
  • Will there be any form of insurancies and how will the long term safety of the system be established? (My opinion there needs to be a responsible economical plan behind the treasury system that is possible to change through an intermediate of experts, perhaps the CF but only when a majority of the community wants it) - for example what if some projects enabled by the treasury caused economical damage or say where judged to have created a monopoly and a large fine was given to the treasury - how would it be enacted - how would you be able to adapt to the economical realities?

In any case I hope we could have some interesting discussions on this. I am both interested long term in creating legal systems (bitlaw) on Cardano but also short term on making sure we have good process for selecting voters and where we have given considerations to the implications of having projects enabled by the treasury.

Here are some more considerations that came into my mind just 10 minutes now after typing and I am sure the rest of the community has many such question as well:

  • Should the system try to encourage geographical diversity or should we target key areas early (Africa/Asia) (My opinion focus on key areas but some incentives also for keeping projects diversified globaly to reduce systemic risks)
  • Should it focus only on technological projects or political and scientific as well. How will progress be measured on different type of projects (or put another way how do we build into the voting process good ways of establishing and measuring goals. My opinion is making good templates that can be adapted by the users and even creating new templates would go a long way in making flexible types of goal and measuring possible)
  • Will the treasury system allow donations from users to specific projects on top of the treasury or even to fill the treasury chest? (My opinion some form of possibility would be usefull for legal reasons, for example in case of a monopoly fine on a project that caused the treasury itself to be liable and then for users of the ecosystem to be able to influx a sum to make sure the treasury did not go bankrupcy. It would also be useful to accelerate adoption say from other venues, you could have a kickstarter for a project on cardano and allow the kickstarter money to be injected to the treasury to that specific project etc.)
  • How will updates on projects be handled? Will the treasury found governing bodies that will say update on project statuses and actively enquire on them or will this be a resonsibility of the Cardano foundation? Has the CF done any legal research on where it could fill a role and what roles are required for an actual treasury system with project implementation? (My opinion it is vital CF starts research on this as the users cannot yet be expected to be domain experts on this field as there is not yet a critical mass of people and just as in coding terms we have a genesis block we need the same for the legal follow through on treasury system projects.)

Or what about scalability issues? We have this for the software why are we not considering them for the treasury system?

  • What happens once we have 1000’s of proposals how will we read and vote on all of them ? Will there be sharding in different geographical regions and will users be able to delegate voting to experts who will then vote on said proposals? How do we as a community create and elect such experts? (I think this part has not been much looked into)
  • How do the treasury track cash flow and show this to users in an easy and transparent way once we have say 1000s of projects in the implementation face some 1 year old some 2 year old etc. How will finances be trickled down to projects will these be monthly, quarterly etc and whats the best middle ground between project stability vs financial stability of the treasury system (I do not have an opinion on this and think this would be a good subject for domain experts in economy)
  • Will there be some form of history of project implementation so voters can gain confidence in proposers of proposals over time? (My opinion this would be a good idea to implement together with CF having a holding hand in establishing identity of proposers of proposals in the early days until we have better routines and software for this)
  • Will the treasury be multi currency at some point (its obviously not) and how will it enable users visability in different currencies? (my opinion is perhaps it is wise for Cardano to remain the fuel and the only currency of the treasury)

To elaborate on “winner takes it all” assuming iohk still has some 2.4 billion ADA any project they vote on will have a huge head start. Even if say google wanted to implement a project it would be quite hard without the support of the tree entities. Worse is if say 20 projects where proposed and only top 10 recieved founds and lets say some who did not win ADA vote where popular among the community (who had less ADA to vote with) then you have a detremental effect to the ecosystem as a whole. One way to solve this would be a trickle down system with tiers of founding. Lets say for example simpler projects with less cost required less ada votes (perhaps even relative to ada used to vote with) while more major projects required more ada voting for it.

To elaborate on Expert voter questions yes there is discussions of such a system in however the decentralization of such experts is not discussed. Just as we do not want a few pools to control the staking I believe there needs to be diversifivation also in expert opinions to avoid group thinking.

Hey, I would love to get into this conversation.
But your posts are super dense with so many different questions that I dont even know where to start!

Do you think it would be easier to discuss each of your points on separate threads over time?

I believe many others, like myself, would love to discuss these issues with you, but are intimidated by the density of your posts :slight_smile:

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Yes we could discuss any single topic. The questions asked are ment as examples to hopefully spark such discussion. If it did not feel inviting to discuss I appologize for that. This is not a one man show it is us the community trying to look at the issues ahead of us.

No need for apologies, and thank you for all these thought-provoking ideas you’ve shared!

I guess it would be good to have someone from the Foundation step in here to shed light on where they currently are on this front, and how we as the community can help.

I’m happy to help in whichever way possible.

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Wow :astonished:, that was quite a read.

There are a lot of questions which will hopefully be part of the research phase of Voltaire.

A couple of things that stood out for me are:

Volume: How do those with voting power have time to consume so many proposals to decide which they want to support?
Realistically, I think many will delegate their votes to a group who have particular interests. People can then check in from time to time to see what the group has used their delegated vote for and to confirm that their interests are still aligned or if they want to move their vote to another group.

Quality: How do we ensure that when a project is funded it delivers what it promised?
I don’t think we can, without invoking an external legal system. Not everything can be quantified by a smart contract. There will certainly be some con-artists, but hopefully over time they will be weeded out and won’t have any future funds provided to them through reputation.

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Great observations Phil on the overall problems at hand.

I think the expert system proposed in the latest treasury will take care of some of the concerns regarding volume but it is still a problem how to make sure we delegating to experts in a good way for the community. How do we decide who are the experts is one of the main things here, how they can present information on the topic that will be voted on or a form of summary of why they vote as they do is another.

I also think a problem will be that with a big quantity of projects we will leave some high quality projects not able to be voted on. You can see this in some of the early treasury systems already out there where only a few and the safest projects are founded. I propose we look into a trickle down type of system instead of winner takes it all type of system so that even high risk high return type of projects can receive some limited founding if that is what the community wants.

Regarding follow up on quality (great framing of the problem) I agree this is hard to follow up. There will always be risks of cons. But we can make sure the system is as robust to this as possible. For example building up reputation on the system for previous projects. (history function). Also I think it is in everyone’s best interest if say CF or Emurgo follows up the early projects to sort of “genesis” block the start of the treasury system. For example even without having to do any legal disputes of any sorts the ones who build these projects might be interested in legal advice as to make it very clear for the users voting in the treasury what they can expect. I also think we DO need to have some kind of fail safe in terms of handling legal issues in case any projects become liable and it should be quite clear from the get go what the treasury can be liable for and what each project can be liable for. (And yes I do realize this needs legal research if even a treasury can be liable and to what extent. Again - we need research on the topic.)

In any case thanks for reading Phil! I think I could make much more points on this as there are so many questions that could be asked. I am happy some have found interest in this topic as for me it is very important we start to think about this. Staking is almost here and now we need to look into voting!


I am certainly looking forward to seeing how the research in this space plays out. In some ways it is the most complex area to build into a blockchain, as it is dealing with more human elements. That’s not to say that PoS wasn’t a complex research area, but it only really had to deal with the human need to retain money and they already kind of knew that it was counter-intuitive for the majority of participants to willingly act in a way that could be detrimental to this.

With governance there are far more variables and motives to have to consider.

I suspect we might be a little early for this conversation however, as all the focus right now is on Shelley. Maybe once it has launched we will see more movement on Voltaire.

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