Voltaire Update: Summary of Essay Concerning CIP-1694
Source: Cardano Improvement Proposal — 1694: Can Decentralized Communities Make Superior Decisions? | by PHOTREK, LLC | Medium by @Kenric_Nelson et al.
The insightful essay titled “Cardano Improvement Proposal — 1694: Can Decentralized Communities Make Superior Decisions?” released on June 9 by authors Kenric Nelson, Juana Attieh, Megan Hess, Vanessa Cardui, and Stephen Whitenstall, thoroughly dissects Cardano’s proposed transition to a community-centric governance model. CIP-1694, as the proposal is known, seeks to expand participation in Cardano’s governance through an innovative tricameral system, introducing new structures such as the Constitutional Committee (CC), Delegated Representatives (DReps) and extending upon existing structures such as Stakepool Operators (SPOs).
The authors delve into the fundamental query: “Can decentralized communities make superior decisions?” Their analysis identifies potential threats to a decentralized autonomous organization (DAO) that Cardano will become, categorizing them into four quadrants based on a public-private and internal-external axis.
- Internal & Public: Overboarding bureaucracy that restricts individual’s autonomy
- Internal & Private: Individuals or small groups that hold sufficient power to dominate the system
- External & Public: Government regulations that attack the system and its operating ability
- External & Private: Centralized competitor whose decision-making diminished the value of the system
The essay argues that the key to overcoming these threats lies in the protocol’s ability to recognize and broadly disseminate the benefits of superior ideas. This approach discourages the accumulation of power while bolstering the organization’s competency. The authors introduce the concept of consent-based decision-making, a process that seeks to obtain individual consent and address objections, contrasting it with the more traditional consensus-based decision-making reliant on voting and approval thresholds. To scale consent-based decision-making for larger organizations, they suggest the formation of autonomous subgroups or “holons.”
In their discussion of governance, they draw parallels between the traditional branches of government—executive, legislative, and judicial—and analogous mechanisms within DAOs. In Cardano’s proposed model, Stakepool Operators (SPOs) are likened to the executive branch, the Delegated Representatives (DReps) to the legislative branch, and the Constitutional Council (CC) to the judicial branch.
Finally, the authors offer detailed recommendations for the three branches of Cardano’s proposed governance model in CIP-1694. For the CC, they suggest implementing strict KYC rules and consent-based decision-making and prohibiting CC members from serving as DReps. DReps, on the other hand, should adopt plural or quadratic voting and register a digital identity. Meanwhile, SPOs should continue to use one-coin-one-vote, expediting CIPs that address multipool operations’ profits.
One critical issue highlighted in the essay is the potential pitfalls of a one-coin-one-vote (1c1v) voting method, especially its implications for Cardano’s proposed governance model. The authors examine ada distribution among addresses, finding that the top 1% of addresses holding ada control over 80% of the circulating supply. Considering this and the nonlinear distribution of wealth and voting influence, the risk of having the voting system be captured by the wealthy few exist.
I will continue to monitor the progression of the Voltaire era and post regular updates in this thread.