Governance Overview

Governance overview

Governance in Cardano has evolved significantly since the introduction of Cardano Improvement Proposal #1694 (CIP-1694), which laid the foundation for a more decentralized and community-driven decision-making process. Named after the birth year of the philosopher Voltaire, this proposal marks the transition to the Voltaire development phase, where governance is self-sustaining and controlled by the Cardano community.

CIP-1694 introduces a tripartite governance structure consisting of delegated representatives (DReps), the constitutional committee, and stake pool operators (SPOs). These bodies work together to review and approve governance actions, which can be submitted by anyone, ensuring a transparent and democratic process.

Cardano’s self-sustaining governance requires the following roles to function properly:

• Ada owners: the ones who have ‘skin in the game’

• DReps: the ones delegated voting power by ada owners

• SPOs: the block producers who maintain the network and vote on certain governance actions

• Constitutional committee: the elected representatives who ensure governance actions comply with the Cardano constitution.

As with stake pools, any ada owner may register to be a DRep and represent themselves and/or others. Also, as with stake pools, ada owners may, instead, delegate their voting rights to any DRep. Voting rights are based on the total ada that is delegated, as a whole number of lovelaces (one ada = 1,000,000 lovelaces).

Driven by the Cardano constitution

The Cardano Blockchain Ecosystem Constitution (‘Cardano constitution') is designed to be the founding document that brings together the community’s values and vision and puts them into text as a set of rules and principles to abide by to maintain the sustainability of the Cardano network.

Why bother?

The pioneer entities of Cardano – EMURGO, Input | Output, and the Cardano Foundation – have relinquished the genesis keys of the blockchain, handing a more mature governance system to the community. Now, the community must take up the challenge and take Cardano to the next level, which means all ada owners must get involved.

These off-chain elements are where Intersect fits in. Becoming an Intersect member offers many opportunities to be involved in framing and maturing Cardano’s governance, much of which happens off-chain.

In addition to Intersect membership, other opportunities include participating in the Cardano forum and social networks.

Join Cardano’s community in guiding its future and encouraging its mass adoption to ensure the success of the most decentralized blockchain. See the sections below for more details.

How to participate

To get involved with decentralized decision-making, start with choosing and installing a governance-compatible wallet. Intersect MBO maintains a current list. Then, check out the governance tools documentation to see what you can do and how.

You can use governance tools to delegate your voting power to a DRep, become a DRep yourself, review and vote on governance actions, submit your own governance action, and more.

Useful resources:

• How to become a DRep
• DRep Pioneer program
• How to delegate your voting power
• How to vote on governance actions.

Governance in more detail

Any ada owner can submit a governance action on the Cardano blockchain. Every governance action must be ratified by at least two of the three governance bodies by on-chain votes. The type of action and the state of the governance system determine which bodies must ratify it.

The constitutional committee votes on the basis of one member, one vote. SPOs and DReps vote on the basis of one lovelace, one vote.

Governance Action	Name	CC Vote	DRep Vote	SPO Vote
1	Motion of no-confidence	-	✓	✓
2a	Update committee/threshold (normal state)	-	✓	✓
2b	Update committee/threshold (state of no-confidence)	-	✓	✓
3	New constitution or guardrails script	✓	✓	-
4	Hard fork initiation	✓	✓	✓
5a	Protocol parameter changes, network group	✓	✓	-
5b	Protocol parameter changes, economic group	✓	✓	-
5c	Protocol parameter changes, technical group	✓	✓	-
5d	Protocol parameter changes, governance group	✓	✓	-
6	Treasury withdrawal	✓	✓	-
7	Info	✓	✓	✓

There is a separate protocol parameter that sets the minimum yes vote for each DRep and SPO vote for each governance action. Some parameters are relevant to security properties of the system. Any proposal attempting to change such a parameter requires an additional vote of the SPO. For more details, see CIP-1694.

The Intersect member-based organization

Intersect MBO is a not-for-profit organization incorporated in Wyoming, USA. Created to support the new governance system, Intersect helps ensure the continuity and future development of Cardano and facilitates governance processes. It fulfills this role with a management board and a number of advisory committees that coordinate the ongoing maintenance and development of the Cardano blockchain and ecosystem. Committees are elected by Intersect members in elections that Intersect facilitates twice a year. Any interested community member or organization can become an Intersect member. Members vote in committee elections on the basis of one member, one vote, regardless of ada holdings.

There are three membership tiers:

• Associate level: free to join, invited to community events and kept informed of community news

• Individual level: a small fee to join (currently US$10.00), entitled to vote in Intersect elections, eligible to serve on Intersect committees, and can apply for grants

• Enterprise level: a larger fee to join (currently US$1,000), all the benefits of an individual, with company profile posted on the Intersect website and the annual report.

The benefits listed above are a summary; for details and how to join, see the Intersect website.