Cardano Governance Updates: Community Input, Voltaire Phase, and CIP-1694 Updates

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
      • 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.


Voltaire Update: Engaging the Cardano Community in Governance Discussions

In this text, we aim to provide a comprehensive summary of the latest discussions, recent blog posts, and other pertinent news related to the age of Voltaire.

Last week, the Cardano Foundation announced the SPO On-Chain Poll, a mechanism for stake pool operators to vote on specific questions based on the total stake amount controlled by their pool. This mechanism is similar to governance action 7 “info” from CIP-1694 as it has no binding effect but serves to gauge sentiment and better understand stake pool operators’ opinions on particular topics. Further information about the SPO On-Chain Poll can be found in this blog post.

On April 18th, IOG introduced the CIP-1694 community-led workshop grant program, co-funded by EMURGO and with support from the Cardano Foundation. This program encourages the community to host CIP-1694 workshops to discuss the intricacies of the proposal and produce outputs that contribute to its improvement. The initiative also aims to bring governance discussions to various countries, engaging participants from diverse backgrounds. The community could apply for governance workshops until May 1st, and successful applicants will be contacted in the coming week.

In addition to community-led workshops, IOG, EMURGO, and the Cardano Foundation will co-host three separate governance workshops. The first workshop will occur in Zug, Switzerland (CF), in early June, followed by the second in Tokyo, Japan (EMURGO). The third workshop, scheduled for July in Edinburgh, will mark the conclusion of the annual workshops and the end of the CIP-1694 design feedback loop. These events’ dates and additional information will be disclosed in early May.

Discussions on CIP-1694 continue through various channels, such as the CIP repository on GitHub and the Cardano Forum Governance category. A notable event from the past weeks was the community governance workshop sessions led by Rick McCracken on Cardano Governance Security. In these sessions, Rick examined the risks and threats that on-chain governance must address, as identified in the CPS - Governance Security he authored.

I will continue to monitor the progression of the Voltaire era and post regular updates in this thread.


Voltaire Update: Recent Updates to CIP-1694

On May 3rd, Jared Corduan, one of the co-authors of CIP-1694, introduced a series of modifications to the proposal, focusing primarily on the Constitutional Committee (CC). For those needing a refresher, the CC, along with Delegated Representatives (DReps) and Stake Pool Operators (SPOs), are the three groups responsible for ratifying the governance actions. However, the CC operates differently, unlike the DReps and SPOs, who employ a token-weighted system and vote on proposals based on personal or delegated interests. Each member of the CC has only one vote, and their role is to assess the constitutionality of a governance action, ensuring it aligns with the yet-to-be-defined Cardano constitution.

The recent updates to CIP-1694 include the following:

  • New Protocol Parameter - Minimum Constitutional Committee Size: A new protocol parameter that defines the minimum size of the committee; has to be a non-negative number.

  • New Protocol Parameter - Maximum Constitutional Committee Term Limit: The maximum term limit will now be a governance protocol parameter, denoted in epochs. During a state of no-confidence, no action can be ratified. Thus, committees in a normal state should plan their succession to avoid disruption.

  • Individual Constitutional Committee Member Term Limits and Rotational Schedule: Previously, the entire Constitutional Committee shared a term limit. Now, individual term limits will be introduced. Members whose terms have expired will lose their voting rights, and members can choose to resign early.

  • No-Confidence State Triggered by Expired Members: The system will enter a state of no-confidence when the number of active committee members falls below the defined minimum. For example, a five-member committee with a quorum of three can still pass governance actions with two expired members if all active members vote ‘Yes.’ However, if another member expires, the system enters a state of no-confidence, as the remaining members cannot meet the quorum.

  • Constitutional Committee Cannot Vote on a New Committee: It was previously possible for the CC to vote alongside DReps to establish a new CC in a normal state. This is no longer the case; only DReps and SPOs can vote on this matter.

  • Interim Constitutional Committee with Short-Term Limits for Bootstrap Phase: The bootstrap phase ends when a set number of epochs have elapsed, as specified in the next ledger era configuration file. This phase will likely last several months post-hard-fork. An interim Constitutional Committee will also be established, with term limits expiring at the end of the bootstrap phase. The rotational schedule of the first non-bootstrap committee could be included in the constitution itself. However, since the Constitutional Committee never votes on new committees, it cannot enforce this rotation.

These updates represent an enhancement to the Constitutional Committee’s framework. They introduce term limitations, establish a minimum committee size, and redefine the committee’s role within the on-chain governance model proposed in CIP-1694. These strategic modifications mark an essential step forward in the evolution of Cardano’s governance structure.

I will continue to monitor the progression of the Voltaire era and post regular updates in this thread.