The Cardano Constitution
The Cardano Constitution, outlined in CIP-1694, serves as an off-chain document capturing the fundamental values and guiding principles of Cardano. Although it currently exists as an informational document, the proposal envisions a potential evolution into a smart-contract-based set of rules within the governance framework. The Constitution, at this stage, remains undefined, and its content is explicitly out of scope for the currently discussed Cardano Improvement Proposal (CIP).
A key element introduced is the Constitutional Committee, representing individuals or entities responsible for ensuring adherence to the Constitution. While not enforceable on-chain, the committee plays a crucial role in voting on the constitutionality of governance actions, fostering a social contract between the committee and the network actors. The committee’s state can be either normal or a state of no-confidence, the latter leading to its replacement. The proposal details the committee’s key setup, replacement mechanism, size flexibility, term limits, and the triggers for entering a state of no-confidence.
Pre-defined and registered Delegate Representatives (DReps) become pivotal for on-chain governance participation. Ada holders can delegate their voting rights to pre-defined DReps such as “Abstain” or “No Confidence” or register themselves as DReps to actively participate in voting. CIP-1694 outlines the registration, retirement, and vote delegation processes for DReps, emphasizing the need for regular activity to maintain active status.
The governance actions framework is introduced, consisting of seven types of actions that can be submitted by any Ada holder. These actions undergo a ratification process through on-chain voting involving three governance bodies: the Constitutional Committee, Delegate Representatives (DReps), and Stake Pool Operators (SPOs). Different types of actions have varying ratification requirements, and the document details the thresholds for each governance body based on action types.
CIP-1694 defines the lifecycle of governance actions, highlighting the ratification, enactment, and expiration processes. It emphasizes the order of enactment, where certain actions take precedence over others. Additionally, it introduces the concept of a deposit, providing an incentive structure and a mechanism for enforcing legitimacy through the forfeiture of rewards for non-participation.
The proposed protocol parameters, grouped into network, economic, technical, and governance categories, outline the specifics of the governance framework, including constitutional committee term limits, action expiration, deposits, and more. The document also introduces the concept of votes, specifying their components, role-based proportions, and the importance of abstain votes.
The governance state, stake snapshot changes, and definitions related to voting stake are detailed to provide a comprehensive understanding of how the governance system operates at the ledger level. Finally, the proposal highlights ongoing research on incentive models for Delegate Representatives and proposes an interim solution involving the escrowing of Lovelace from the Cardano treasury.
In summary, the proposal presents a comprehensive governance framework for Cardano, addressing the Constitutional Committee, Delegate Representatives, governance actions, protocol parameters, votes, and related mechanisms. The emphasis is on flexibility, inclusivity, and transparency in building a robust foundation for decentralized decision-making in the Cardano ecosystem.
