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A Beginners Guide to CIP-1694: An On-Chain Decentralized Governance Mechanism for Cardano

Updated: May 28

Hey Cardanians! Welcome to a Special Edition of the Cardano Newsletter!!!


This edition is brought to you by Walkers CNFT, a Walk-to-Earn project already live on Cardano.


Walkers CNFT Cardano

We have a new special edition of the Newsletter!! Today we wanted to talk a bit about governance in Cardano… I understand that you might not care about governance, democracy, and all of that. BUT believe me, this is quite cool, Cardano is creating its UNIQUE type of government. Here is the article: 


 

CIP-1694: An On-Chain Decentralized Governance Mechanism for Cardano: A Beginners Guide


Voltaire Era Cardano

Cardano is on a quest to become the most decentralized blockchain in existence. This journey involves a crucial step: the founding entities of Cardano—IOHK, the Cardano Foundation, and Emurgo—will transfer governance entirely to the Cardano community by "burning their keys." This transition emphasizes a shift to a governance model led by the community, where individual Cardano holders dictate the blockchain's future direction.


Cardano's evolution is marked by several developmental phases, each contributing uniquely to the blockchain's maturity:


  • Byron: Established the foundational infrastructure.

  • Shelley: Focused on decentralization and introduced a more distributed network architecture.

  • Goguen: Introduced smart contracts, widening Cardano's utility.

  • Basho: Aims at enhancing scalability to support increased transaction volumes.


These eras collectively pave the way for Cardano to grow into a robust, decentralized, and scalable ecosystem.


The Voltaire Era


The Voltaire era represents the final piece of Cardano's puzzle, introducing a self-sustaining ecosystem. Central to this era is CIP-1694, which proposes a comprehensive voting and treasury system. This system empowers network participants to use their stakes and voting rights to directly influence Cardano's developmental trajectory.


CIP-1694 is a leap towards true decentralization and community governance. It allows stakeholders to propose, vote on, and fund projects and improvements, ensuring the network's evolution is driven by its users' collective wisdom.


Understanding CIP-1694


Introduced in late 2022, CIP-1694 outlines a minimum-viable governance model anchored in participatory governance principles. This model transitions from a static set of governance keys to a dynamic, inclusive system. Named after Voltaire to symbolize Cardano's commitment to full decentralization, CIP-1694 is a significant step towards a democratic, sustainable ecosystem.


The Proposal’s Structure


CIP-1694 introduces a new governance structure, enabling decentralized decision-making through:


  • Governance Actions: Special transactions for governance decisions.

  • Votes: Transactions that allow stakeholders to voice their opinions on proposals.

This structure is supported by three governance bodies:

  • A constitutional committee.

  • Delegated representatives (DReps).

  • Stake pool operators (SPOs).


All these 3 combined, will upvote or downvote different governance actions, on chain. Governance actions include actions like, Treasury withdrawals, HardForks, parameter changes, between the most important. With the implementation of CIP 1694, Cardano will add a governance layer on top of its consensus protocol. Implementing a successful on-chain decentralized government.This ensures a balanced, transparent, and accountable governance model, with each body playing a crucial role in decision-making.


How It Works


Any Cardano user can propose governance actions, but approval requires ratification by at least two of the three governance bodies. This process emphasizes community involvement and ensures that decisions reflect the collective will of Cardano holders.


The Road Ahead


The "Change" upgrade in Q2 2024 marks a significant milestone, transitioning Cardano into the Voltaire era. This upgrade heralds a new phase of on-chain governance, symbolizing Cardano's maturation into a fully autonomous blockchain.


Joining The Movement


A pivotal development for Cardano's governance is the establishment of Intersect. This is a member-based organization tasked with ensuring Cardano's continuity and future development in a decentralized manner. Intersect brings together community members behind a shared vision, putting them at the forefront of Cardano's evolution.


Intersect


Intersect MBO

All three core Cardano institutions, including the Cardano Foundation, Input Output, and Emurgo, have created an endorsed Intersect. As the governance roadmap continues to evolve in 2024, these institutions will gradually delegate more operational tasks to the community through Intersect's working groups and committees, paving the way for a more decentralized governance model. Creating a thriving community of Cardano experts, builders, and professionals. This community will play a pivotal role in the future of Cardano.


As Intersect matures, it will facilitate the creation of various working groups tailored to address Cardano's specific needs, like marketing, legals, NFTs, and more. This approach will build a community of communities, all working towards Cardano's growth and vision.


Constitutional Workshops


Between Q2-Q3, Cardano enthusiasts will be able to participate in a series of Constitutional Workshops held all around the world, contributing to the development and writing of the first Cardano Constitution, which will establish Cardano´s values and principles for the future. If you are looking to learn more about it I suggest you apply to become an organizer. Applications should be opening in the next few months. 


Constitutional Convention


In Q4 2024, a Constitutional Convention will be hosted in Buenos Aires, Argentina, bringing representatives from the workshops worldwide to discuss and finalize the Cardano Constitution. Finally, 2024 will culminate in a historic vote on the constitution using CIP 1694! Forever marking the history of Decentralized Governance.


Here is Intersect’s roadmap (I will be doing my own version soon)


Envisioning The Future


The introduction of CIP-1694 through the Voltaire era underscores Cardano's dedication to innovation and community empowerment. It represents a major stride towards a blockchain that is not only advanced but also deeply democratic and self-sustaining. As Cardano evolves, the principles of the Voltaire era and CIP-1694 will guide the path towards refined decentralized governance.


References:



 

Walkers CNFTs: Walk-to-Earn on Cardano


Walkers CNFTs: W2E

Something that I would have never imagined to be talking about is blockchain and fitness. Well…these guys did it, they are merging both these worlds into one and on Cardano! Walkers CNFT is a project on the Cardano network, pioneering the walk-to-earn concept. This innovative platform merges physical activity with digital rewards, encouraging users to stay active while earning Tokens. By walking, users generate $WLK tokens which can be traded for ADA. I’ve already been testing it on my phone and so far I am enjoying it quite a bit, Ever since I’ve started working in Crypto I became quite sedentary, hopefully this project will make me move more + I get some tokens to become healthier.


 Walkers Referral Program


They just announced the launch of their Referral Program, a new avenue for users to earn extra rewards. Participants can now earn 5 ADA and 66,600 $WLK tokens for every individual who mints an Electricity generator using their referral link.


I’ll probably be covering more of this project and their updates in the coming weeks/months as their project evolves. So far I am quite surprised and really hope they keep growing, I need to excercise more.



 

A message from Lucas


Quite an interesting topic this one, I believe Decentralized Governance will play a key role this upcoming market cycle, I am quite excited to be a part of it!


Just a heads up, don’t consider anything I say as Financial advise. Do your own homework before investing into any project!


Well thats all from me now! See you on monday! Hope you like it :)


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