The Cardano Parliament - splitting stake and governance rights

Hi All,

I saw a point raised about staking vs governance and in my reply thought of something I wanted to share more broadly to see what people think.

I think we will need a mixed system of representative delegates who get delegated voting rights from ada holders and to allow people to vote directly on any proposal or to create a new proposal. This system would be entirely separate from the stake pool system.

I think we could use some of the treasury to create, fund, maintain, and improve a Parliament of Cardano site. There representatives could seek delegations with ‘campaign pages’ with information about who they are and what perspectives they will use when voting. This can be auto-translated text to be accessible to people who know different language. The voting itself can take place with a hard coded transparent record displayed for each representative, the schedule of proposals to vote on could live on the Parliament of Cardano site, and the committee areas/forums to formulate new proposals could also exist here. All actions of governance would reside in one place and you just sign off with your keys to delegate or vote directly on proposals to ensure authenticity of held ada through the blockchain and no one voting more than once.

Governance being tied to staking is a risky proposition. Stake pool operators are just one part of the ecosystem. As people begin to use ada for everyday transactions, as defi operations get going, and as other novel uses of ada as a blockchain solution develop - their interests will not always be in alignment with stake pool operators who might get a huge de facto delegation of voting rights if governance is not split from staking.

I’d say the number 1 risk is that stake pool operators who have a huge pool or a huge number of pools will use their voting rights to raise fees or split the way rewards are shared between pool operators and people who stake to pools - or to increase the inflation reward method so their rewards increase. They can vote to enrich themselves.

Single voters who are not staked could vote against this, but I think a lack of a distinct delegation model will lead to very very very low participation rates. If people’s rights are not delegated to stake pools or to distinct delegates, my guess is less than 1% of ada holders would be involved in any given vote. That’s must particularly democratic and the better of the two options is to create a Parliment of Cardano with representatives who seek delegation of governance rights - rather than using stake pool operators as both staking and governance.

I’d say we let people vote directly still if they wish as a ‘delegation to self’ but to also have a distinct set of representatives who could be anyone, maybe a stake pool operator, maybe not. The developer community could run as representatives, the defi people might want to be heard, and side chains that develop could gain a voice based on their ada holdings, anyone can list themselves as a representative and begin to seek delegation of voting rights from ada holders etc.

The big advantage here is there is no need for ‘elections’. I can login and see the very transparent voting records of the person I’ve delegated to and if they have been a faithless delegate saying they have one set of values, but voting in ways I disagree with…I can change my delegation on the spot. Instant democracy, no waiting to vote, no concentrated period of campaigns, etc.

One concern I had was the transfer of ada as regular currency to trade value. I’d propose we strip voting delegation on all ada that is transferred. This way my voting preferences do not get distributed out to others by default. This was not a concern with staking since in order to transfer ada, you must by definition unstake the ada first. But with governance rights being independent. I think it should just be automatically stripped on all transferred ada.

If we force people to ‘undelegate’ their voting rights before transferring, it’ll just be an unnecessary extra step and a hindrance to ada holders…plus I’d think everyone would agree that voting delegations should be stripped/removed from all transferred ada. It would not be reasonable to allow delegation to transfer and would corrupt the governance structure as small amounts of ada would end up in uninterested parties hands who would not take an active interest in how their ada is or is not delegated to a given representative. It is a small ask for people who move ada between their own wallets to then go and reapply their delegation of voting rights and is a smaller problem than perpetual voting delegations getting pumped out into the community to new holders who may not agree with the old holder’s voting preferences.

Anyhow, that’s my idea for a Parliament of Cardano or perhaps a Congress of Cardano or Delegate Legislature of Cardano - it has a transparent website with authentic voting records and proposal mechanism, along with the delegation process for ada holders to lend their voting rights to someone else or to vote directly themselves. And it splits staking from governance to ensure diverse voices have power and to avoid a cabal of stakers who endlessly raise transfer fees or change the rules to allow super sized pools with no reduction in award size if the pool gets too big, etc. to favor themselves.

Thanks for your consideration and thoughts!