Voltaire Update: Recap of CIP-1694 Workshop in Edinburgh
Just last week, the fascinating conclusion of the CIP-1694 workshop took place in Edinburgh. On July 11 and 12, representatives from IOG, EMURGO, and the Cardano Foundation engaged with a global network of workshop hosts, collectively pondering over Cardano’s Minimum Viable Governance (MVG) model as described in the CIP-1694. Participants were encouraged to work with a specific Miro board set up for the workshop.
The first day, July 11, was about networking and sharing unique insights from the various in-person and online workshops. There were, in total, 50 workshops, 30 in-person and 20 online, with over 1000 participants from at least 23 countries. Representatives from the in-person workshop were invited to Edinburgh to discuss and share their insights with their peers.
Key observations from day 1 included a minimal viable constitution, presented by the LATAM representatives, that sparked considerable interest. The group also acknowledged the need for DReps to be diverse to adequately represent the Cardano community. It became clear that off-chain discussions are integral as they articulate the motives behind on-chain actions. There was an understanding that a significant portion of governance would be managed off-chain while CIP-1694 would dictate what happens on-chain. Furthermore, the group agreed that proper tooling needs to be available before the mainnet launch. The exchange of diverse opinions and feedback was recognized as a critical aspect of a successful governance system. The groups also discussed that the Minimal Viable Governance (MVG) launch could proceed even without a formal constitution or constitutional committee (CC). Lastly, many participants stressed the importance of a publicly available roadmap.
The discussions from the first day indicated that while people wish to participate, they prefer to avoid unnecessary confusion and red tape. This necessitates the clarification of the extent of off-chain involvement within the MVG. High community participation in devnets/testnets was deemed essential for better understanding. The day’s discussions also raised important questions. For instance, if the initial rollout of CIP-1694 had a small maximum treasury withdrawal, could there be a defined growth process for withdrawal sizes? It was also queried whether one coin, one vote (1c1v) could be reversed in the future.
The next steps, as defined by the participants, require a focus on various elements of the governance structure. First, the DRep incentives must be addressed, then discussing if a delegation to a DRep should have a fixed expiration date. Questions on the need for DRep saturation, similar to the k parameter for Stake Pool Operators (SPOs), must be answered. In addition, mechanisms to handle emergencies that demand a quick response must be implemented. It’s also important to finalize the on-chain parameters for the initial setup conditions of the MVG. Focused discussions solely on on-chain mechanisms and parameters will be essential. Compromises should be sought to reach the MVG successfully. Proposals for a DRep school and detailed discussions on what parameters can be changed with an on-chain vote must be considered. Lastly, the bootstrap phase (time between mainnet launch and having a working DRep system) needs further elaboration, including its goals, timeline, and Key Performance Indicators (KPIs).
The venue was filled with passionate debates and insightful presentations on the second day. All focused on the future of Cardano’s governance system. Kevin Hammond started with a presentation on the impressive level of community engagement with CIP-1694.
In his presentations, Kevin laid out the six key issues discussed in all CIP-1694 workshops: on-chain deposits, treasury withdrawals, community tooling, action expiration, action thresholds, and DRep incentives. From these, four had achieved a consensus among the community:
- Treasury withdrawals: The community agreed on the need for limits on treasury withdrawals, with the consensus being small (100k ADA), mid (1m ADA), and large (10m ADA) withdrawal caps. There was also an underlying belief that “Cardano needs to be in a working condition.”
- Community tooling: The necessity for various tools was highlighted, including dashboards, DRep directories, mobile DApp support, and educational materials.
- Action Expiration: The consensus centered on a six epochs timeframe for action expiration.
- DRep Incentives: There was broad agreement that DReps should be compensated, with the preferred method being a percentage of ADA staked delegated to the DReps.
Three topics failed to achieve a clear consensus: on-chain deposits for DReps and governance actions and the thresholds for governance actions’ enactment. For the latter, the discussion included proposals for a simple majority rule for all governance actions or having different thresholds depending on the type of action.
A presentation by Philips Lazos and Vangelis Markakis, both IOG researchers, delved deeper into DRep incentives. They proposed an on-chain compensation mechanism for rewarding DReps in ADA, which should be based on the stake delegated to them. They explored several possible schemes, with a study on reward-sharing schemes via a game-theoretic analysis of “effort games.” Options such as a top-k flat scheme, top-k threshold-based scheme, and top-k tiered scheme were considered.
Following the presentation about DRep incentives, the workshop transitioned into a voting phase where all participants were asked to vote and potentially ratify six focal issues: Treasury Withdrawals, Community Tooling, Action Expiration, DRep Incentives, On-Chain Deposits, and Action Thresholds. Only three of the six topics selected for the voting phase were voted on.
The group agreed with 47 yes, 0 no, and 4 Abstain votes that the features listed for community tooling were correctly set.
Another topic that was voted on and received overwhelming support was the Action Expiration time frame of 6 epochs, roughly one month (44 Yes, 6 No, 5 Abstain). Similarly, the Action Threshold question of “Do we need differing levels of participation and approval for each type of governance action OR keep them the same?” Forty-four votes for differing levels, three votes for Keep the Same, and ten votes for Abstain.
Specific key topics, such as treasury withdrawals, did not go to a vote. This subject sparked the most debate throughout the day due to confusion over the categories of small (<= 100k ADA), medium (100k to 1m ADA), and large (1m to 10m ADA; maximum = 10m ADA) withdrawals. The consensus from the discussion was the need for a specialized working group to examine this topic and develop strategies for setting the initial thresholds for the devnet.
Another discussion also centered around DRep incentives, but no decisive conclusion was reached. Key questions yet to be answered include: when are DReps paid, where do the funds come from, and what formula is used to calculate rewards?
On-Chain Deposits, another key issue, did not go to a vote due to the need for more time to reach a consensus. It is vital to remember that deposits are required to protect the network from potential disruptions. This can occur if creating excessive on-chain governance actions becomes too cheap, leading to a possible denial of service attack.
After the intense discussions around the focal topics, all 14 groups of the workshop were tasked to create a concept for community tooling that addresses one of the following topics:
- DRep Directories
- Mobile DApp Support
- Educational Materials
- Language Support
- User-Friendly Dashboards
- Easy Voting Tools
- Accessibility
You can check out all the different ideas on the Miro board. Following the ideation process, participants could vote for their favorite project by standing up from their table and walking to the team’s table they wished to support. The top three concepts were:
- DiDi App (DRep Directories) - That aims to provide a standard for DRep public profiles, boosting their visibility.
- Educational Material - Covering everything from being a DRep, voter, and proposer.
- The DReptory (DRep Directories) - A one-stop-shop for voters to research, find current information and access the DRep’s previous performance.
Day 2 of the CIP-1694 workshop in Edinburgh witnessed vibrant discussions and valuable insights critical for the Cardano network’s future development. Although there was no consensus on every topic, the event highlighted the power of collective discussion and decision-making. This spirit of community involvement and open discussion exemplifies Cardano’s commitment to decentralized governance and sets a promising direction for the platform’s future developments.
I will continue to monitor and update you about the developments of CIP-1694, its ratification process, and every other news item about the Age of Voltaire.