Please describe your proposed solution.
Governance generally comes in a variety of forms: Its implementations may range from simple non-binding community votings, to completely decentralised treasury management and protocol parameter control. Each such form of governance comes with its own requirements in terms of the trade-offs to be made regarding decentralisation, transaction cost, ease-of-use, etc.
All current governance solutions however require a utility token that is used to balance voting power. This is necessary to ensure, in simple term, that "no one votes twice". Instead Atala DID could be used to ensure exactly this without the need for a utility token. If a utility token is still given, additionally having DID integration enables advanced weighting of voting power, e.g., weights scaling quadratically instead of linearly with the amount of tokens held. Without DID this is not possible as redistributing tokens across a different number of wallets would enable manipulation of such non-linear weights.
The overall goal of this project is to develop a unified governance platform enabling all forms of governance integrated with Atala PRISM DID solutions. In the remainder of this answer, we describe what forms of governance implementations this shall include.
In Fund9, the Cardano community supported us in developing a secure off-chain governance solution that has since been open-sourced and successfully used for the first elections on the MuesliSwap governance platform. The advantages of such an off-chain solution are that there is no transaction fee, no load is put on the chain, and yet the system is still completely secure and even comes with many desirable properties regarding privacy and ballot auditability. Such a solution is ideal for involving the community in further development of a platform, i.e. for elections whose result does not directly trigger other on-chain events.
Governance however also includes processes for which such an off-chain voting system is not well suited: Many DAOs are interested in maintaining a treasury, e.g. to fund further development of their products. For this kind of treasury management, having to rely on a trusted party to execute the outcomes of a vote is obviously undesirable. Instead, the treasury should be smart-contract governed and hence directly linkable to voting outcomes - enabling the DAO to operate in a fully decentralised way.
Another instance where election results should ideally directly trigger on-chain events are protocol parameter updates: For example, DEX protocols suitable for stable coins, such as concentrated liquidity pools (as implemented on MuesliSwap) or other stable swap mechanisms have lately seen increasing adoption on Cardano. Such protocols involve certain parameters governing the exact behaviour of the protocol. These parameters can either be manually set by a trusted party. A more desirable solution though is of course to perform parameter updates via smart contract controlled community governance.
Currently, simple on-chain voting protocols exist on Cardano. However, a key part of leveraging the power of such elections is to link their outcome to other on-chain events as described in above examples. Such integrations are still lacking on Cardano. In particular, we are not aware of any smart contract based treasury implementation that may be used together with such votings. Cardano also does not yet have any (DeFi) protocols whose parameters are controlled via on-chain governance. We think that providing and open sourcing these missing pieces will pave the way for realising the vision of truly decentralised DAOs on Cardano.
How does your proposed solution address the challenge and what benefits will this bring to the Cardano ecosystem?
Our goal is to provide a full-fledged open-source community governance platform powered by Atala PRISM DID that can easily be adopted by any project building on Cardano that aims to turn into a DAO. This governance package includes our already deployed secure off-chain voting system from Fund9 and will be complemented by the now proposed on-chain voting with treasury management and parameter update integration.
Having such a governance solution available will significantly simplify the process of building DAOs on Cardano. In particular, Cardano then stands out as a blockchain with well-developed DID-integrated governance. This may lead to an increasing number of DAOs choosing Cardano as their home which in turn enriches the Cardano ecosystem: DAOs <3 Cardano, and Cardano <3 DAOs.
How do you intend to measure the success of your project?
The Cardano Voltaire era is all about turning the Cardano blockchain into a self-sustaining system at a global scale. With our efforts of developing dApp-level governance infrastructure, we hope to greatly contribute to effective and secure governance at a project-level scale. We consider this project a success if not only MuesliSwap itself can benefit from DID-powered governance including decentralised treasury management and community governed protocol parameter control (which it definitely will!) but also many other projects can reuse our open-source code or even extend it further.
Please describe your plans to share the outputs and results of your project?
We have a comprehensive plan to share the outputs and results of our project with the Cardano community and the broader blockchain ecosystem. Our goal is to ensure transparency, knowledge sharing, and wide accessibility to the outcomes of our research and development efforts. Here are our plans to disseminate the project's outputs over a reasonable timescale:
- Blog posts: We will publish regular blog posts outlining our insights and proposed solutions, their implementation on Cardano, and other findings from our research. These blog posts are also used to share detailed updates on our progress with the community and to give outlooks on future steps and directions.
- Open-source repositories: The development process, including the codebase will be shared on open-source platforms like GitHub. We will create dedicated repositories that provide the community with access to the code, documentation, and updates on the development progress. By regularly updating and maintaining these repositories, we ensure that developers and researchers can access and contribute to the project's outputs throughout its duration.
- Community engagement: We plan to actively engage with the Cardano community through various channels, including social media, forums, and community events. We will conduct regular Twitter spaces sessions, where we will provide updates on the development process, share insights from our research, and invite community feedback and suggestions. These sessions will foster dialogue, collaboration, and knowledge exchange among community members.
- Documentation and tutorials: To facilitate adoption and understanding, we will create comprehensive documentation and tutorials that explain the implementation, usage, and integration of our governance solutions. These resources will be made available on our project's website and other relevant platforms. By providing clear and accessible documentation, we aim to empower developers to integrate our governance mechanisms into their own projects and contribute to the growth of the Cardano ecosystem.
By executing these plans and ensuring a consistent and transparent approach to sharing outputs, we aim to maximize the impact of our project, foster collaboration, and contribute to the overall advancement of DAOs on Cardano.