This week we look at Project Catalyst and Cardano's on-chain governance and treasury system. What it is and how it works compared to other blockchains.
The Cardano project has launched its Plutus education program where it is taking on a stream of eager developers wanting to get their hands on some Plutus code and start developing smart contracts on Cardano.
For those that did not make it into the program, you can still read and participate in the learning and get up to speed with Plutus development. You can find the documentation on Github.
https://github.com/input-output-hk/plutus-pioneer-program
In a sad turn of events, we learn that the owner of the stake pool SALAD who has done everything they can to keep their digital life secure has lost access to all of their keys and backups to their digital life. This included their wallets, stake pool keys and much more. This means that the pool is now a ghost pool and will eventually disappear from existence once the KES keys expire on the pool. Everything on the pool including the 145,000 ADA pledge is all gone.
Essentially they had everything secured on an encrypted hard drive and authentication pass to unlock it. That authentication process failed to unlock and wiped the drive in the process clearing out all the data on the drive.
Very sad and unfortunate but from what I've read, there is an initiative by the Cardano community to help rebuild the pool.
1/ This is a very sad day for me and for @insaladaPool. Long story short: my most important digital life files are forever gone. Everything SALAD, #Cardano, Daedalus, Yoroi, Ledger, Trezor, GPG, SSH, 2FA recovery codes, and more. All gone. #CardanoCommunity #ada $ada
— 🔴 Insalada Stake Pool - SALAD 🥩🥗 (@insaladaPool) April 8, 2021
Here are some of the projects that I have been following on Twitter that have or are releasing Non Fungible Tokens (NFTs) on Cardano.
Patrick Tobler from NFT-maker.io has put together a quick and easy way to create an NFT with no technical skill. Feel free to experiment and explore how NFTs work on Cardano.
These guys have put together an online market place for NFT creators to sell and trade NFTs on a Discord. The people that are providing the escrow service are the same ones that are looking after SpaceBudz.
To understand Project Catalyst I decided to go to the source of where it all began, and that is with the research paper published by Bingsheng Zhang, Roman Oliynykov and Hamed Balogun in Feb 2019. Their research references the proposal of another 48 articles and papers from other projects including Ethereum Classic and Dash.
You can read the full research paper at the IOHK research library.
You can watch Bingsheng Zhang's presentation at the Network and Distributed System Security Symposium in 2019.
Project Catalyst is Cardano's on-chain governance, treasury, and community innovation for the project.
On-chain governance refers to the ability for users that hold Cardano in their wallets to vote using their Cardano balance on certain things such as the community innovation projects. This is done by registering your wallet with project catalyst and then choosing innovation projects that you'd like to see get funded.
To be clear, we are just using the balance in your wallet and not the actual ADA to vote. That balance is recorded and is used to determine your voting power. The more ADA you hold, the more voting power you have.
In learning more about how Cardano's treasury system works, I went a head and read the paper and research behind it.
Treasury funding, perhaps is the most crucial ingredient in a decentralised community-controlled decision-making system. It must not only be regular, but also sourced from decentralised means.
A Treasury System for Cryptocurrencies: Enabling Better Collaborative Intelligence: 3.4 Treasury funding sources
Bitcoin's development and funding comes from the Bitcoin foundation. It derives its funding from donations from miners and the community and memberships. If this source dried up, then the development and maintenance of Bitcoin may stop. Miners are the ones that are incentivised to mine Bitcoin and are rewarded with Bitcoin when they produce blocks. Developers who write and maintain the code don't get anything for their efforts.
Back in 2017 we saw the Bitcoin community become split on many development issues revolving around scaling where parts of the community wanted larger block sizes where others wanted it to remain as it is and optimise what was stored in the blocks and keeping it at a 1MB block.
This lead to a split in the community with some wanting larger block sizes and others want to keep it the same but with a few optimisation tweaks.
This lead to the creation of Segregated Witness (SegWit) soft fork, side chains, Bitcoin Cash hard fork and many other forks around the project. Companies such as Blockstream appeared and started hiring all the Bitcoin developers they could get their hands on to develop not Bitcoin itself, but its own protocol layer on a side chain bypassing Bitcoin called the Lightning Network.
Due to the lack of Governance and funding built into Bitcoin, problems ensued, development slowed and in fighting occurred as there was no mechanism that was built into Bitcoin to solve these problems.
Cardano’s treasury is decentralised following the research paper of Zhang. It is funded through several different sources including the taxation of stake pool rewards and transaction fees, holding a portion of newly minted coins in its treasury and the acceptance of donations.
These funds are held in the treasure to fund the proposed projects and initiatives where the community and stakeholders can cast their votes.
Community innovation is broken down into challenges with allocated budgets in each challenge. These challenges are created to ensure that adequate funding is spread across different types of project and isn't centralised into what is popular at the moment, for example, NFTs or DeFi.
There are a number of ways to participate in in Project Catalyst with the for areas being voting, becoming an advisor, referring users to submit a successful proposal and submitting a proposal.
The quickest and easiest would be to vote on the ideas and proposals that have been submitted and refined.
You can find all of these projects on The Cardano IdeaScale website, https://cardano.ideascale.com. Unfortunately you have to register to view the currently submitted proposals and ideas but once you do, you can see all of the ideas and concepts that have been proposed by the community. You can also see post funding rounds and what projects were involved.
The voting process is multi stepped in that you must firstly register your wallet that meets the required minimum balance of 500 ADA, and then download the Catalyst Voting app. From the app you can then vote on the various projects that are listed. If you don't understand the ideas and concepts that are being presented. You can delegate your vote to another topic expert voter, perhaps someone that has had time to do all the research and understand all the projects to best make an educated vote on the proposals. This process is called liquid democracy and hasn't been implemented anywhere else before according to Zhang.
These are the community advisors that work through all the proposals helping to assess proposals submitted to IdeaScale and help Voters navigate through all of these ideas.
Specificly, advisors will:
You can join the Catalyst Community Advisors Telegram channel to learn more about the process and onboarding to become an advisor.
This is someone that refers someone to submit an idea and proposal to Project Catalyst and is eventually funded. It may be one of the most rewarding as only people that refer and have the project accepted for funding would receive the referrer reward.
The most valuable contribution is to submit a proposal to Catalyst. If you have an idea that fits within the various project challenges, then now is the time to submit your idea and start refining your submissions. Each category has different funding levels.
You can read my own submission on WooCommerce & Other Ecom Integration to accept ADA payment gateway and provide feedback on IdeaScale.
There is a complete FAQ guide and proposal writing guide provided by IOHK.
Enjoying the podcast? Leave a message and I'll see if I can add it to the show.
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