C-Fund of 10 Million Dollars for developers who want to build dApps on Cardano. Cardano treasury and voting system explained. Community fund and liquid democracy system...
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The Cardano Virtual Summit started today and is still live right now.
In his welcoming speech of the day Charles Hoskinson already announced several things like the native token standard on the Cardano Blockchain to be rolled out in the next 120 days, a new product called Prism (an identity management system) and the so called C-Fund of 10 Million Dollars for developers who want to build dApps on Cardano.
These 10 Million Dollars will be matched by another 10 Million by Cardanos funding partner Wave Financial to a total of 20 Million Dollars. The C-Fund aims to fund projects in the range of $250k to $500k with the purpose of building a great ecosystem of DeFi Applications. A Website will be set up over the course of next month and projects with good ideas will be able to apply and get funded to achieve their goals.
So all developers keep your eyes open and get ready to develop the next DeFi killer app on Cardano.
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Another thing that will exist in addition to the C-Fund, will be, as Hoskinson called it, a DC-Fund. This decentralized fund also known as the Cardano Treasury System will be implemented with the Voltaire era, which will introduce the governance features into the Cardano ecosystem. With the treasury system there'll also be implemented a voting system, with which "network participants will be able to use their stake and voting rights to influence the future development of the network."
The treasury system will be a community fund, offering the ability to propose projects and vote which ones are gonna be funded. These can be any projects, making funding available not just for developers but also for researchers of any discipline or any other project of any kind.
Hoskinson proposed this as creating something like Cardanos very own National Science Foundation and the possibility to fund research and education all across the globe making funding for open source research and much more accessible for potentially everyone.
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In a separate keynote Professor Bingsheng Zhang explained a little bit more about how this will work and what a treasury system is exactly.
A treasury system collects money from various sources and distributes it again. In the case of Cardano it will get money from three resources: Minting coins, taxation and donations. The tax in this case being little portions of the transaction fees.
He then cited Abraham Lincoln saying "Government of the people, by the people, for the people, shall not perish from the earth“ and asked who in this case are the people? Who's supposed to govern the system? In the Cardano community this is supposed to be everyone that holds ADA. So everyone who owns ADA will be able to participate in the democratic decision making process.
Let me break down the information for you.
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Collaborative Decision Making via Voting
The voting power of the individual ADA holder will be linked to the amount of ADA they have. There will be a voter registration process requiring a minimum deposit of ADA to prevent DDoS attacks. ADA has to be staked for the time of the vote and there will be rewards to incentivize participating in the voting process. So the voting power will be related to the amount of time and ressources you put in.
Delegating Voting Power and Experts
Individual voters will have the ability to delegate their voting power to experts that have registered as such beforehand. This means if you don't feel confident in deciding what's the best option in an upcoming vote, you can choose an expert on the matter to vote on your behalf.
This is part of what's called a delegative democracy or in the special case of Cardano a liquid democracy. In comparison to conventional democracy (direct or representative) where there's only one way to vote, you can either vote directly or delegate your voting power to someone else. This delegation can even be passed on further to another entity. So basically it's possible for your grandma to delegate her vote to you and then for you to delegate both of your combined voting power to an expert of your choice.
The Treasury System
The overall treasury voting system will be divided in three different periods called epochs. There'll be a pre-voting epoch, a voting epoch, and a post-voting epoch which will each have the following functions.
- project proposing and voter registration
- committee selection, key setup, ballot casting
- tally, signing, execution and reward distribution
The system will collect money in a treasury account and that money can only be moved when the majority signs the transactions. That'S why signing is required in the post-voting epoch.
The Voting Process
Here i'll try a breakdown of the voting process how Bingsheng Zhang explained it.
1. Project Proposal
The project proposal period will be open to everyone and everyone can propose a project for the vote. There'll be a small fee again to prevent DDoS attacks. There'll be two stages of proposal. In stage one a commitment of a project proposal will be submitted and in stage two it will be reviewed and turned into an actual project proposal. This will be done to prevent possible advantages from submitting a proposal at a later point in time. So you can't just look at other proposals and propose the exact same just for instance at a cheaper price.
For voting there'll also be two stages, a priority round and an approval round. The priority round will only happen when there are less overall funds available than have been required by all projects combined. In this round everyone will be marking their favorite projects and ranking them. You can choose as many projects as you like but don't have to rank all the projects. You can choose 3 projects and rank them from 1 to 3. From these rankings a short list will be compiled which serves as the basis for the actual vote. In stage two, the approval round, voters can vote yes, no or abstain for every short listed project.
Voters will have the possibility of so called statement voting, meaning to express their opinion as a statement in a "if this then that" kinda way. For example "if expert A and B voted yes then i’ll also vote yes (or no)".
To try to guarantee the success of the overall treasury and voting system, there'll be a reputation system on top of that. This will rate the voters according to three categories, which will also impact their voting power in future votes.
- regularity of the work
- quality of total contributions
- proposal funded ratio
This means someone that participates in voting process regularly and votes for the highest quality projects that actually turn out to get funded will build up a higher reputation as a trusted member of the system and get more voting power in upcoming votes.
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Participating in all of this will be as easy as using a tap to vote cellphone app, which in fact Charles Hoskinson said is under development. So be prepared for the upcoming age of Cardano and the Voltaire era bringing real decentralization and for the Cardano Blockchain "the capacity to be maintained and improved over time in a decentralized way." The voting process will also be used for improvement proposals for the Cardano Blockchain and thus will be a key element of the future of Cardano starting with the implementation of Shelley.
What do you think about the proposed voting system? Can it potentially be a problem that voting power is determined by the amount of ADA individual voters hold? Is it really different or better than traditional voting systems? Can it ensure that only real and serious projects get funded? Tell me in the comments.
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