Cardano is a blockchain with governance.
Voting power is proportional to the amount of Ada someone has; the more ada, the more influence on decision making. As part of the liquid democracy approach, in addition to direct yes/no voting, an individual can delegate his or her voting power to an expert he or she trusts. In this case, the expert can vote directly on the proposal he or she considers most important. After the vote, project proposals may be scored on the number of yes/no votes and pre-selected; weaker project proposals will be discarded. Then, pre-selected proposals may be ranked according to their score, and the highest ranked proposals will be funded in turn until the treasury fund is depleted. The strategy of dividing the decision-making process into stages allows consensus to be reached on the priority of improvements.
To ensure voter privacy, the research team has invented a zero-knowledge honest verifier for unit-vector encryption with log-size communication. Zero knowledge techniques are mathematical methods used to verify things without revealing any underlying data. In this case, the zero-knowledge test means that someone can vote without revealing any information about themselves other than that they are eligible to vote. This eliminates any possibility of coercion by the voter.
Prototype treasurers have been created in the IOHK for benchmarking purposes. Implementation of the research as a basis for Voltaire will help provide a reliable and secure means for the treasury to vote and make decisions.
Project Catalyst is an experimental treasury system that combines proposal and voting procedures focused on establishing a democratic culture within the Cardano community. Initially, the Cardano treasury will be replenished with a percentage of the stakeholder rewards ensuring a sustainable source of treasury. Other blockchains have treasury systems, but the IOHK’s combines complete privacy through zero-knowledge testing, liquid democracy through expert involvement and proxy voting, and participation for all, not just one governing entity. This should encourage participation, incentive and decentralization to make fair and transparent decisions.
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