June 1, 2023

The Basics of CIP-1694 (Cardano Improvement Proposal)

Albert Kim


With the Cardano blockchain having grown its ecosystem of users and applications over the past several years, the focus has now shifted to Cardano’s decentralized governance policies to ensure its future sustainability.

As a decentralized blockchain, Cardano was meant to always eventually be governed by its community.

CIP-1694 is a discussion proposal that represents the first concerted effort in delivering on this promise. It plays a crucial role in shaping the future of Cardano and brings another major upgrade for the Cardano community.

Let’s review all you need to know about CIP-1694 and what it means for the Cardano community.

What is a CIP?

Credit: @Cardano (Twitter)

CIP-1694 is a specific Cardano Improvement Proposal. It is a formal document from the Cardano community that contains specifications and organizational notes about topics related to on-chain governance for Cardano including Cardano native tokens, new standards for on-chain improvements, and any changes proposed for the Cardano protocol, among others.

It follows a previous system from the internet called a Request for Comment (RFC). The process starts with an initial draft. It can be created by a single individual, a small group, or a large organization. The draft document is taken by the Cardano community to review, improve, and then revise for any mistakes or to make it more complete. Anyone in the world can volunteer to read up on draft CIPs. Some topics are technical and require blockchain knowledge; others are community proposals.

Those who volunteer to review CIPs meet bi-weekly and publish summaries of all discussions in a dedicated GitHub.

The meetings happen on a Discord server that anyone can join via this invite.

Finally, the meetings are recorded and also published on a YouTube channel maintained by the Cardano Foundation.

The entire process is meant to be as inclusive and transparent as possible for anyone in the Cardano community to participate. The CIPs are the most direct way for an ordinary Cardano community member to contribute to the future of the Cardano blockchain and get involved with others in the community.

One of the CIPs attracting the most attention at the moment is CIP-1694 and its implications for the Voltaire era of Cardano, the final development period.

What is CIP-1694?

CIP-1694 was named after the birth year of Voltaire, and it is the main focal point around the start of Cardano’s Voltaire era. This means that CIP-1694 will start to form the governing bodies of the Cardano protocol including a Constitutional Committee, Delegated Representatives (dReps), and SPOs, and create voting policies and other governance details about Cardano.

The governance mechanism will be introduced in stages and then gradually become more complex. Not all of the decisions regarding Cardano will immediately be given to the community, and the process will take time to fully finish.

Also, at the moment, the proposal is very much experimental and is subject to many debates and discussions from the various stakeholders in the Cardano community including developers, holders, academics, stake pool operators, and others.

The governance of a decentralized protocol such as Cardano has never been attempted in this scope and thus, there are many things to discuss regarding how the pieces will work together.

For this reason, the governance rollup will be an iterative process. In it, changes introduced will first be on a trial basis. After, there will be a period of study and interpretation to see how the changes are performed at the Cardano protocol level.

This careful approach will ensure the Cardano community, developers, projects, and other stakeholders have enough time to adjust. Also, it will allow the Cardano ecosystem to correct any ideas that didn’t work as expected or implement other changes that were suggested during the trial.

The first body to oversee the governance of Cardano will be called the Constitutional Committee. It’ll ensure that the Cardano Constitution is followed and that it is updated according to a process.

The Cardano Constitution itself is still in the discussion stage. There is no official published document for it, but it’ll become the foundation of all future Cardano governance decisions and the main item used as the foundation of the Voltaire era.

There was a pilot CIP-1694 workshop held in March 2023 in Colorado, USA and there are more CIP-1694 workshops planned throughout the year. Some workshop dates have been announced including ones in Tokyo, Japan; Edinburgh, Scotland; and Zug, Switzerland that will be hosted by EMURGO, IOG, and CF.

How does CIP-1694 affect the Cardano community?

CIP-1694 aims to give every Cardano community member a say in the future direction of Cardano. The Cardano Constitution will be the foundational document, and every member will be able to show their preferences by voting on-chain. This way, the Cardano community will be involved in the decisions that shape Cardano’s future.

Additionally, there will be several roles open for governance. There will be membership to the Constitutional Committee and to the Delegated Representatives (DReps) which will be aggregators of voting power and ultimately be able to cast votes. Finally, Stake Pool Operators (SPOs) are one of the three groups responsible for ratifying governance actions by voting.

These roles will be the way people can take charge of the Cardano network. People from all over the globe can become Committee members or DReps.

What is the future of Cardano after CIP-1694?

Once CIP-1694 is confirmed and running, Cardano will be in the hands of the community. This means the Constitution Committee, Dreps, SPOs, and other community members. Collectively, all of them will be able to make proposals, have them be presented for a vote, and if successful be implemented.

The Cardano network will become the first decentralized blockchain protocol controlled and run by its community which will be significant.

The vision for a decentralized ecosystem running on open-source blockchain technology and governed by its community will become a reality.

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Working closely with Cardano ecosystem partners and projects, EMURGO is committed to the development of the Cardano ecosystem for the global community.

To stay up-to-date on the latest announcements and news related to Cardano, follow EMURGO on Twitter and the official channels listed below.


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