Cardano is widely considered as one of the major competitors (along with Polkadot) to Ethereum. Project catalyst is Cardano's brave attempt to strengthen decentralized decision making. Cardano has already been successful in securely launching its decentralized network through Shelley. With Shelley, anyone holding Ada can delegate to Pools, unstake and withdrawals are instantaneous. Cardano is now expanding towards a decentralized governance and voting mechanism through Project Catalyst.
Project Catalyst is releasing funds in a phased wise manner to projects which will build on the existing Cardano framework and thereby develop the ecosystem. The public funds are the foundations of on-chain governance, treasury, and community innovation for Cardano.
The public fund started with Fund 0. It was a trial fund consisting of a focussed group made up of IOG ( Research and Development) team members.
After a successful trial of Fund 0, Cardano launched Fund 1. Through Fund 1, the Cardano community was able to participate in Project Catalyst for the first time. 50 volunteers developed the platform and processes. Though the community was involved, this was still a trial in terms of incentivization. The voting cycle still did not incorporate ADA funding. The community members helped to test and refine the processes. They also created detailed documentation and guidelines. IOHK, the research arm of Cardano were able to design alternative avenues where the community can discuss “meta” proposals. Writing a clean and impactful proposal for receiving funding is of utmost importance. A voting platform (Catalyst) is as good as the ideas that are presented in it. The trials help IOHK understand what will be an impactful proposal. IOHK also decided to support people to write a fair proposal. All these culminated towards the launch of Fund 2.
Fund 2 was open to all. Anybody put forward their idea by creating a proposal. IOHK ensured that they keep a strong Governance. Instead of launching popular dapps directly, the focus was kept tight. The challenge statement was, “How can we encourage developers and entrepreneurs to build Dapps and businesses on top of Cardano in the next 6 months?”
The types of idea contribution were however not limited. The community was encouraged to bring in ideas in the areas of marketing initiatives and infrastructure development, to business planning and content creation. It is to be noted that the voting process was not available in Yoroi (mobile wallet) but was limited to Daedelus (Desktop wallet). The voting process was divided into multiple stages.
- Community members were requested to provide their ideas and perspective. This is the idea-exploration phase.
- IOHK has developed an innovative platform for voting. As a next step, the participants uploaded their ideas on the innovation platform to collaborate and discuss. Discussions were also encouraged via a dedicated Telegram chat channel.
- Once the ideas became concrete, the proposals were put forward for voting. The mobile application is under development. Any Ada holder can review the proposals on the platform and judge their merit. Voting is linked to the voter's Ada holding. Voters will earn Ada rewards for their voting activity. It is to be noted that this activity has no conflict with the staking rewards. Voters will continue to earn staking rewards. Voting will perform as a transaction. Voters need to indicate ‘yes,’ or ‘no.’
Fund 2 had $250k worth of Ada allocated. The voting process resulted in 11 winners. All of these will be the important and one of the first projects in Cardano. I will discuss them in my next article. Note that recently Cardano has also launched Fund 3 which involves newer proposals.
Project catalyst paved the way towards Cardano's Voltaire era. This era will bring in a democratic and sustainable governance system. Unlike many other projects, every Ada holder will be able to get involved to make decisions. They will decide the future of the platform, in a decentralized way.
Note: This post was first published here for Cryptowriter in association with voice.com.
Read my previous article: Blockchain in the Lifecycle of a Human Being – A Case Study – Part 2
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