In this roundup, I’m trying to create an overview of the topics and themes discussed during the previous weeks concerning the Voltaire phase, CIP-1694, potential new CIPs or CPSs, and other relevant governance conversations within the Cardano community.
On March 13th, 2023, Jared Corduan, co-author of CIP-1694, unveiled a host of updates to the document, incorporating feedback gathered via GitHub comments on the pull request and outcomes from the Voltaire workshop in Colorado (February 28th - March 01st). The updates and changes include:
- Constitutional Committee (CC) term limits:
- Introducing a governance protocol parameter specifying the maximum number of epochs the CC can ratify governance actions.
- Term limit resets if a new CC is elected or the quorum size changes.
- Changes to the protocol parameter governance action:
- Four distinct groups: Network, Economic, Technical, and Governance.
- Governance group encompasses voting thresholds, constitutional committee term limits, governance action expiration, govDeposit, and drepDeposit.
- Two pre-defined DReps that delegators can select:
- Abstain marks the stake as not participating in governance. Abstain votes are not included in the active voting stake.
- No Confidence
- Counts as a no vote on every governance action, except a motion of no confidence.
- Registered DReps can be a native or Plutus script.
- Incentives for Ada holders to delegate voting stake.
- After the bootstrap phase, reward accounts are blocked from withdrawing rewards unless their stake credential is delegated to a DRep.
- DRep incentives:
- Research into the incentive model is still ongoing.
- The interim proposal suggests escrowing Lovelace from the Cardano treasury until the community reaches a consensus on this crucial decision through the emerging on-chain governance mechanism. Alternatively, DReps could compensate themselves via the “Treasury withdrawal” governance action, which would be auditable on-chain and should represent an off-chain agreement between DReps and delegators.
- New Governance Action: Info
- Records actions on-chain without effect.
- Active Voting Stake Threshold (AVST) was dropped.
- Avoid clashing of governance actions by including the previous governance action ID of its given type.
- Controlling the number of active governance actions relies on off-chain socialization.
- The ratification of CIP-1694 is a circular problem.
- A governance framework is needed to agree on the final governance framework, and CIPs are not authoritative governance mechanisms but describe technical solutions deemed sound by experts.
- On-Chain Governance Bootstrap phase special provisions:
- CC quorum vote to change protocol parameters and sufficient SPO vote to initiate a hard fork.
- The bootstrap phase ends when a sufficient stake % is delegated to DReps, or a given number of epochs has passed.
- Many believe that voting turnout won’t strain the system’s throughput. As a temporary safety measure upon ending the bootstrap phase, only DReps in the top X-ranked by stake or with at least Y Lovelace will be considered in the stake distribution. X will increase, and Y will decrease each epoch until they reach a negligible impact. If congestion becomes an issue, a hard fork could impose stricter limitations on DReps.
Updates and changes to CIP-1694 have sparked controversy among the Cardano community, particularly the idea of incentivizing high participation and legitimacy by blocking the withdrawal of accrued ada staking rewards, which are only unlockable if the wallet is delegated to any governance DRep, including the proposed pre-defined DReps. It is crucial to note that staking rewards are not lost but merely inaccessible until the wallet is delegated to a DRep.
Following the updates on CIP-1694, other community members proposed alternative governance mechanisms, such as @HeptaSean and his Minimal Viable Governance proposal shared on the Cardano Forum. He proposed a governance framework without a constitution or CC, no DReps, no SPO votes, and a voting system where every ada holder can directly vote. He suggests that essential governance actions include implementing hard forks, updating parameters, managing treasury withdrawals, and conducting polls.
Also noteworthy is a draft CPS shared by Pi Lanningham. This CPS aims to address the broad topic of Cardano governance by outlining motivations, goals, constraints, and open questions. It fosters more general philosophical discussions that could lead to alternative governance CIPs. The community will benefit from diverse perspectives by refining CIP-1694 or improving governance beyond the initial minimum viable governance.
I will continue to monitor the progression of the Voltaire era and post regular updates in this thread.