The Cardano Blockchain is one of the most advanced blockchains in the world and acts as a fully decentralized public ledger for tracking transactions and contracts. It is a smart contract platform that is based on an independent blockchain, powered by Ouroboros, its native proof-of-stake protocol.
When it comes to the governance of the Cardano Blockchain, there are several different components at play. These include an incentivized voting system, where stakeholders are rewarded for participating in the decision-making process; a decentralized protocol improvement system (CIP).
The Cardano Blockchain currently relies mainly of the genesis team (genesis key holders) in order to introduce modifications to the protocol. Although the process of improvements and mainly hard forks have been quite smooth and agreed upon by stakeholders on the Cardano blockchain (Ada holders, SPOs), a decentralized solution to governance was long awaited. CIP-1694 constitutes the first substantial effort toward this goal.
CIP-1694 is quite special in Cardano history since it is one of the few that had very extensive and intensive arguments and discussions around it. One of the main reasons is that the smallest mistake in this CIP could destroy the decentralization of the protocol or the general incentives structure that makes Cardano special.
In layman’s language, CIP-1694 introduces a structure into the governance and discusses general rules to occur when any case of governance happens. One thing is to be noted, the structure outlined is quite detailed and shows the amount of brain power that went into it. For instance, the document relies on the main board in a lot of the voting alongside SPO and Dreps voted, but it also anticipates when a board is to be compromised and loses the trust of Ada holders and therefore includes a special voting scheme for a non-trust case.
In general, I appreciate that the numbers regarding the voting schemes were not predetermined and were left up to discussion for the community since such numbers would necessitate a lot of research beforehand. The only thing that might concern me is the way how these numbers will be determined since they might be a deal breaker for some community members. Especially since a large amount of Ada is helped by centralized exchanges. I would also be curious to know how the initial board will be determined in terms of genesis board members.
Another front I think the discussion should try to investigate is the different ways that could be used to increase awareness and participation in voting. Although the Drep system seems to be quite a good way to solve this, it remains to show the number of people that will actually choose Dreps. Furthermore, it is not trivial that people will be informed about the ability to choose a Drep, especially if this choice is not seamlessly integrated with light wallets similar to how delegation works. A decent way of doing this would be to make the choice of Dreps as SPOs by default unless the holders chose otherwise. Limitations of this method might be imbalances in the checks and balances and the case where some SPOs are not Dreps.