Recap of CIP-1694 Workshop in Zug

Last Saturday, June 03, one of the long-awaited CIP-1694 workshops took place at CV Labs in Zug. Cardano community members joined representatives from the Cardano Foundation, IOG, and EMURGO to engage in exciting discussions and conversations around key topics of CIP-1694 and the Age of Voltaire.

The workshop kicked off at 09:30 am with a short welcoming speech from Nicolas Cerny highlighting why we were there and was followed by an introduction from the workshop facilitators about how participants should contribute. A dedicated Miro board was chosen as the primary medium for participants to collect their ideas and create output. The way the workshop was structured was that only one topic at a time was discussed among all participants.

First, each participant was asked to brainstorm alone and afterward to discuss and share insights with group members seated at the same table. Once the discussion was over, each group was asked to record their main finding of the discussed topic on the respective section on the miro board. Once that was completed, participants were asked to vote on the findings. Each participant had three votes to award to the different findings of the currently discussed topic. This process of first brainstorming and then voting continued for the entire workshop.

During the first half of the workshop, the following topics were discussed:

CIP-1694 Insights & Opportunities: Every attendee was asked to record insights and opportunities they gathered while reading the CIP.
The top-voted insights and opportunities were:

  1. How can powerful bodies within the ecosystem be prevented from taking over the democratic process? (8 votes)
  2. How to promote involvement and avoid democratic apathy? (6 votes)
  3. We need to find a way to overcome the bootstrap problem and how to legitimize a governance model like CIP-1694 (5 votes)

On-chain Deposits: What amount of ada should be deposited to submit a governance action? What amount of ada should be deposited when registering as a DRep?
The top-voted key themes were:

  1. Governance Action Deposit: High Value (7 votes)
  2. As low as possible for governance actions. I don’t think the deposit system alone is a good anti-spam method. In the way they are, you would need at least to burn (or use otherwise) the deposit (if the proposal is not accepted or if it is “strongly” rejected). You can prevent spam indirectly → accept low deposits but focus on apps that give people filters to see only proposals with high deposits. The rest could even be “rejected by default” to avoid “dangerous” proposals slipping in. Allow others to contribute to the deposit (pooled deposit) so that the proposal earns visibility (6 votes)
  3. DRep Registration Deposit: Mid Value (5 votes)

Treasury Withdrawal: The Treasury withdrawal action stipulates three different values for a low, mid, and high value. What should be the voting thresholds and values for each? Consider <= 100k ada, <= 1M ada, and <= 10M ada.
The top-voted key themes were:

  1. The voting threshold should be a continuous function of:
    • amount requested
    • the size of the treasury
    • rate of depletion
      So that we prevent the treasury from being drained too fast and make it harder to get withdrawals accepted in a short time frame. The fiat-value dependency can be adjusted easily by moving the lower bound with one (Governance Action (GA) (18 votes)
  2. The voting time should be proportionate to the value. The decision to deploy a higher amount of funds should be evaluated for a longer time by the community. (8 votes)
  3. Quantity and threshold shall be combined with a vesting schedule. (6 votes)

Community Tooling: What tools and user experiences need to exist to lower barriers to participation and make Cardano’s on-chain governance easy to engage with?
The top-voted key themes were:

  1. Voting Center App (8 votes):
    • Review governance action proposals
    • Register as a DRrep
    • Delegate to a DRep
    • Chatrooms for debate
    • The communication channel between DRep and delegator
  2. Give users an easy way to actively use their voting power for certain GA categories and delegate for others (e.g., delegate for more technical parameters, vote for the constitutional committee) (8 votes)
  3. In an ongoing vote, the results should not be visible to not bias the vote. (6 votes)

After the lunch break, the second half of the workshop ensued. Conversations continued, and many other topics were discussed:

Action Thresholds: What quorum and passing percentage thresholds are required to ratify a governance action (i.e., Constitution Amendments may warrant a supermajority)? Consider all seven governance actions.
The top-voted key themes were:

  1. Cooling period - Two voting at least two weeks apart from one another. (11 votes)
  2. Majorities (9 votes):
    • Supermajority: 70% quorum and 90% approval
    • Simple majority: 60% quorum and 70% approval
  3. Segregate the governance actions by importance (6 votes):
    • Group 1 (Supermajority): (1) Motion of no-confidence; (3) Updates to the Constitution; (4) Hard-Fork Initiation.
    • Group 2 (Simple majority): (2) New constitutional committee and/or threshold; (5) Protocol Parameter Changes; (6) Treasury Withdrawals.
  4. For MVG and bootstrapping phase, start with a relatively high quorum and passing percentage (~75%) to run the system as it currently runs. Then lower in steps afterward. (5 votes)

Action Expiration: If a governance action is not ratified, how many epochs should a governance action stay active before it expires and the deposit is returned to the proposer?
The top-voted key themes were:

  1. Proposer specifies TTL (Time To Live) themselves. Same as regular transactions. (14 votes)
  2. Social consensus should be there before the GA is proposed on-chain; the main discussion should happen before GA is submitted (7 votes)
  3. Differentiated approach (7 votes):
    • 36 epochs (6 months) for super majority proposals
    • 6 epochs (1 month) for simple majority proposals
    • Immediate release upon reaching the quorum

DRep Incentives: Should DReps be incentivized? And if so, how much and how should the payments be managed?
The top-voted key themes were:

  1. No, and absolutely not - off-chain incentives are good enough. Good voting results in attention proves professionalism, and enables more business (aka stake for the very likely SPO that DReps run) (10 votes)
  2. DReps should be paid. They should only be paid if a certain percentage of (active) votes are allocated to them and they participate in votes. They can abstain if they do not have or want to formulate an opinion — maybe because the topic is too technical. (6 votes)
  3. We should allow for compensation for the efforts made by the DRep. (not a salary but more like expense coverage) (5 votes)

The DRep incentive discussion was the most debated topic during the entire workshop, with one side having the firm opinion that there should be no incentives on a protocol level for DReps as this could potentially lead to attracting the wrong kind of DReps that are only participating due to the rewards. At the same time, another group strongly believes that rewards or at least compensation for DReps are needed to award them for their efforts. After this engaging discussion, the group decided to vote on which topic to cover next, and with six votes, the group selected the following topic:

We need to find a way to overcome the bootstrap problem and legitimize a governance model like CIP-1694. The top-voted key themes were:

  1. Transitionary period with a prefixed timeline to prepare: (a) education; (b) DReps registration; (c) tools. The transitionary period should be divided into phases and milestones. (10 votes)
  2. Ethereum model (8 votes):
    • have parallel ghost chain “new”… blocks identical mirror blocks from the normal chain
    • have normal chain normally
    • build infra (DReps, etc.) on the new chain
    • at block X switch tips
  3. SPOs legitimize the CIP by upgrading nodes (6 votes)

Following the conversations and discussion around the various topics, participants were asked to do a retrospective about the workshop, especially regarding the Observations, Implications, and Next Steps. The Next Steps were then again voted on, and the following topics garnered the most votes:

  1. Finalize the scope of Minimum Viable Governance! (MVG)
  2. Educate as to how Cardano governance differs from other blockchains and as well “traditional” democratic systems.
  3. Ratify CIP-1694 via various methods (SPO Poll, Cardano Ballot, etc.)

The discussion of CIP-1694 and on-chain governance continues after this workshop. The session in Zug is just one part of the overall process of defining and scoping the future on-chain governance model of Cardano.

We want to thank everyone who participated in the CIP-1694 workshop in Zug and took the time to discuss and debate the future of Cardano’s on-chain governance. Without community engagement, governance cannot succeed.

If you are interested in attending a CIP-1694 workshop, check out the interactive map and find out where the next workshop is happening.


The video about the workshop is now live on YouTube. :tada: