July 11, 2023

Explaining the Bodies in Cardano Governance

Albert Kim


In a previous blog, we covered the basics of the concept of Liquid Democracy in Cardano blockchain governance.

In this blog, we’ll elaborate more on how the Cardano blockchain has set up roles for the Constitutional Committee, Delegated Representatives (DReps), and Stake Pool Operators (SPOs) to integrate Liquid Democracy and its advantages for on-chain decentralized governance. 

First, we have to keep in mind that decentralized governance is a new experiment and is being developed with the input of the community. 

It has not been attempted at the scale of a system like Cardano with its millions of global users and there are no real case studies. 

For these reasons, all the details presented here are subject to change as more discussion continues within the Cardano community in its Voltaire era. 

As the realities of Liquid Democracy applied to a decentralized blockchain like Cardano become more apparent, adjustments will be made along the way to continuously upgrade governance mechanisms. 

It’s important to keep in mind that this is just the starting point and that the future goal is to have a smoothly-run governance structure of Cardano that is decentralized and accessible to everyone. 

The Governing bodies of liquid democracy
Explaining the Bodies in Cardano Governance-Blog Infographic

The outlines of the Liquid Democracy model are being discussed worldwide in the CIP-1694 workshops. The results will shape the first iteration of what will be the first decentralized government model for a blockchain, especially one of Cardano’s scale. 

In the current model, there are already some institutions outlined that will become the backbone of the Liquid Democracy system. 

The objective is to focus on two of them and give more details on their inner workings while we also briefly look at the SPOs (Stake Pool Operators). 

These two governing bodies we’ll describe are accessible to anyone in the Cardano community. Their power and legitimacy come from the fact that they are completely open. They will be in charge of much of the operations of the government and also direct the future of the governance model. 

Their roles are extremely important and a lot rests on the shoulders of both these institutions. The name of the two bodies is the Constitutional Committee and the Delegated Representatives (DReps). Let’s unpack them both.

The Constitutional Committee

In short, the Constitutional Committee is defined in the current CIP-1694 document as a committee “which represents a set of individuals or entities that are collectively responsible for ensuring that the Constitution is respected.” 

The Cardano Constitution is being discussed to become the document that will guide the governing principles for the Cardano network. At the moment, there are only drafts of it and it’s very much under discussion, but once there is an established document, the Constitutional Committee will be in charge of enforcing its principles. 

The members of the Constitutional Committee have to vote on any decision that affects governance and decide if it goes against the Constitution. It cannot create new initiatives, nor as of its current design, modify the once presented for a vote.

The Committee decides whether a proposal goes against the Cardano Constitution. It’s a binary vote, which is meant to preserve the rule of the Constitution over the entire network. 

The Constitutional Committee will be instituted initially for the first interaction with members of the Cardano community and then it’ll change as the governance model advances.   

Members of the Constitutional Committee

The number of members has not yet been decided. It’s expected that the number will change over time and be any non-negative number. At some points, there may be more members than at a previous stage. So, the committee won’t ever have a fixed number of participants. 

The members also don’t have to be only individuals. It’s expected that some members will represent whole entities that are corporations, groups, or other forms of collective institutions that support the Cardano network. 

Replacing the Constitutional Committee

The Constitutional Committee can be considered as having two states: a normal state and a state of no-confidence. In the first one, it means the committee is working as expected and it’s operating normally.

The second state signals that it has lost the backing of the community and must be replaced.

The other two governing bodies of Cardano, the DReps and the SPO Council, are the ones that determine if the Constitutional Committee is in a state of no-confidence.

The threshold of the vote required by the other two bodies has not yet been decided. The result of the vote can be the complete or partial replacement of the Constitutional Committee.  

Term Limits

The Constitutional Committee won’t have periodic elections. This means that the individual committee members will each have different expirations for their mandates. The members will each be replaced once their terms are concluded and this can happen many times during a year. 

As of now, the new members have to be voted by the SPOs and the DReps to be confirmed to the Constitutional Committee. The threshold has not been decided, nor what is the nominations procedure for new members.

The Delegated Representatives (DReps)

Delegated Representatives are registered members of the Cardano community who can receive the delegation of voting power. Individuals have voting power by the amount of ADA each control. These can be delegated to a registered DRep and used as voting power as well. 

Each DRep votes with all the ADA delegated to them when deciding on the proposals up for a vote. The ADA can be migrated from DRep to DRep at any point, or broken down and one person can delegate portions of their ADA to different DReps.

In the same way, ADA delegated to a pool is not transferred, ADA delegated to a DReps does not change ownership. The ADA always remains in control of the original individual. 

Selection process

Any member of the Cardano community can register and receive a DRep ID. This means they can receive the delegation of the ADA holders. Registration is the only requirement to become a DRep and what determines the influence of any one DRep is how much voting power is accumulated by them. 

This means there is no set number of DReps although details are subject to discussion. At any point, the number of active DReps can increase or decrease, as ADA holders migrate their voting power from different representatives. 

Term Limits

Again, there are no term limits for the DReps. An active DRep has a non-negative amount of voting power and is voting on different proposals. The non-active ones are those who retire their DRep ID and no longer accept voting power delegation. Finally, there can be unsuccessful DReps who have an active ID but no voting power. 

As voting power migrates and is delegated to different DReps. In some cases, a single DRep can see all the voting power moved to another DRep for a while. The DReps are a flexible body of representatives that are meant to adjust to the needs of the network. 

The SPOs (Stake Pool Operators)

Finally, we have the SPOs or Stake Pool Operators. They are the second voting block on the Liquid Democracy model. They use the ADA delegated to their pool as voting power and use it to choose among any proposals under consideration. 

Anyone who has an active stake pool on Cardano can vote, but it’s possible to abstain. The number of SPOs and the amount of ADA delegated to them is the voting power of this institution. 

For now, those are the different institutions meant to take up the governance of Cardano. Each of the three bodies is meant to balance the other and give a voice to the ADA holders as a whole. 

As we said at the start, the current model is very much in the early stages of planning. The CIP-1694 workshops are collecting feedback from all over the world and once the first cycle is over, much of this design will be modified. 

The road to a fully self-governed Cardano network is a long one. Each step must be carefully considered and enough information has to be gathered to make changes. This journey we’ll be a rewarding one and the entire community must participate to make it successful.

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