Cardano Governance Update, 11th Feb

00:00
The Cardano governance is seriously heating up at the moment and there’s a lot of discussion and debate happening, everything from whether or not DReps should be paid and compensated for their time and effort, or how can we incentivise general users to delegate to DReps or even just participate within governance itself. We also have the various budgets coming out from the working groups, etc. and various other organisations and entities are going to throw their hats in and put out their proposals and budget.

00:29
So there’s a lot to cover here. Let’s get into it. Now the biggest talking point at the moment is around whether DReps should be compensated or not within their ecosystem for their work. There’s a lot of people out there that do think that they should be compensated or even if it’s just a token amount, just a little bit of something just to compensate and say thank you for your time. Others out there are starkly against that particular proposal.

00:56
because you could see ways that DReps could potentially game the system or just to extract ADA out of the treasury. So there’s various different opinions around how this could possibly play out. Last year in Sydney, I attended a D-rep workshop and at that workshop, we mostly all came to the consensus that DReps should be compensated in some sort of way for their time and effort in regards to…

01:24
reviewing governance actions and voting on behalf of their delegates. But if you look at X, if you look at Twitter, the majority of the conversations on there are starkly against it. So it’s really interesting to see both sides and points of view here at the moment to see which way this could possibly go. We are still very early days and personally, I think probably not. We probably don’t need compensation at the moment. It’s not very laborious as a governance action, maybe once a month at the moment.

01:54
that are pressing concerns about the budget, for example, and DReps will need to go through these budgets and look through them in detail and vote on this and whether or not it should be approved. So a lot of DReps out there will need to put their time and effort into that. But that’s probably just once a year, a large amount of effort once a year. And all of these other smaller governance actions that come into play may not need as much time and effort. So that’s that’s the way I view things at the moment.

02:24
and okay with not taking compensation for any of the time and effort and work that I do as a DRep until it becomes too much of a time sync. Until that time comes, I will do the role as a DRep completely for free. But as soon as it becomes almost a full time job and overtakes all my time for my other commitments then I’ll step away. I’ll abstain from all the votes.

02:49
or just stop voting altogether and walk away from the DRep process and not participate. So that’s my point of view and my stance and where I stand with the whole DRep side of things. So if it becomes a job and I’m not being compensated for it, then I won’t continue with the process. Now I’ve got my day job, I’ve got side hustles, I’ve got the business, I’ve got this YouTube channel which doesn’t really make much money, but I spend a considerable amount of time on. I’ve got a family, I’ve got my boxing commitments. I’ve got all sorts of things.

03:19
that I have to put in front of Cardano that, you know, the higher priorities. Cardano doesn’t pay the bills. So I need to make sure that everything else is in order before I spend any time on the Cardano ecosystem. So that’s my priorities and where I stand with all of this. But Dave here, this is his stance. And I think this is shared by many people in the community. At the moment,

03:46
I will vote no on proposals that seek to provide compensation for DReps. The reason for this is simple. Everyone who signed up understood the responsibility conditions of the role beforehand. We are still in early stages and introducing a compensation scheme now would likely be difficult to reverse later. Feels premature and potentially counterproductive. And yeah, I totally agree with that. But the main thing, the biggest thing that I’m worried about with the lack of compensation

04:16
in the future is that we’re going to see people burn out and leave the ecosystem. So this is a post from Ada Northpool. He’s Einstein. He’s I think that’s how he pronounced his name, but he’s a major, he’s a big contributor over the last few years. I’ve done interviews with him before. I’ll put a link in the top right hand corner for you guys and down below so you can see that interview, but he’s worked a lot within the governance space on Cardano over the last few years and you know, it’s a lot of work.

04:46
and time and effort that is put in. And the way that he feels it now, it’s like a, I’m sorry, essentially the community’s gone. You’re not gonna be paid for anything that you do. Thank you for all your time and effort. Here’s a pat on the back. If you wanna leave, see you later. And you know, I’ve been in community roles before in other open source projects, and it kind of felt the same way. You put in so much time and effort into running meetups,

05:16
writing tutorials, doing courses, doing all sorts of things to try and drive the adoption of whatever you’re working on. And in the end, there’s no compensation for it. Yeah, you might get some work and notoriety and becoming a key opinion leader within the space. But even that requires more work and effort to convert into sales and you need to have a business model and all things around it to actually create some sort of funnel and

05:45
Yes, sustain yourself. And a lot of people in that process simply just burn out. They contribute as much as they can. They can deliver everything they feel that they should be delivering for the ecosystem. And then end of it, because there’s no compensation, there’s no reward at the end of it. They leave and you never see them again. They completely burnt out. I think a really big prime example of this is Berry Ales, the creator of Space Buds and NAMI wallet.

06:14
He put in so much time and effort into those two things, creating the first NFT collection on the Cardano ecosystem and working out ways that we could trade them and all sorts of really cool things. And now he’s gone. He’s completely disappeared. He’s nowhere to be seen and not contributing into the space anymore. He’s completely burnt himself out. Hopefully he did get paid, got made some money and, you know, he’s moved on to other things.

06:44
That’s the type of scenario that we can see from a lot of contributors. I know a lot of people do have better business sense. They do have business models. They do know how to generate revenue around whatever they’re doing, or they already have a nice sustainable income from somewhere else, and they don’t have to worry too much about that. But others do not, and they will burn themselves out and disappear from this space. And if you just read through this thread here from Einstein,

07:12
You can see the other comments from other people as well. And a lot of people feel the same way, but this is the way things are at the moment. Maybe we can change things. Maybe we can improve on this. Maybe we won’t repeat the same mistakes that I made in the past when contributing to ecosystem. So hopefully this is just…

07:35
Hopefully we don’t lose people in the space. Like I’ll be extremely upset and sad to see huge contributors that were around in the early days leave the space and no longer part of the Cardano ecosystem. But anyway, that’s my two cents. Sorry for the rant, but you know, sometimes you just have to let this all out.

07:55
Now governance in the Cardano ecosystem is growing and it’s really good to see that the progress of voting on various governance actions is it takes a little while but you know it kicks in eventually. This is the latest governance action around the Cardano Constitution replacing the interim one with the officially written one that was ratified last year in Argentina, Buenos Aires. So this screenshot here shows it at 57.

08:22
or 3% and live stats today on the AIDAS stat website. This one here, it’s now at 63.18%. So we’re almost at that 75% threshold that needs to be passed for this particular governance action to be pushed through. So we’re almost there. And it’s really good to see more and more people come up, step up and start voting within the space. Now, some of these things do take a little while. We see a governance action go up and it may take a week for people to actually

08:51
see that it’s been posted and then a few more days for them to actually analyze review understand what’s going on see how other people are voting and then as make their voting actions afterwards so please be patient with some your DReps there there is a month window for a lot of these governance actions that are put on chain. In other news here we have Jack Briggs posting about the budget proposals coming up just around the corner so it’s all still working progress it just.

09:19
making it look nice. So you can see here he says, we want to get the form, get it formatted and hosted properly. So apologies in advance for not having the budget published today. So hopefully it’ll be out tomorrow. So it’s coming really soon. It’s going to be posted on the Kudano forum. You’ll be able to see there along with all work in progress materials. So this is all the draft stuff that is that we’ve all been waiting on. So we can actually start reviewing and then vote on within

09:49
the next couple of weeks. So we’ll see this coming really soon. Now those that don’t know Jack, he’s the ecosystem director at Intersect. He’s one of the big dogs there and he’s definitely one to watch in this space. So if you haven’t given Jack a follow, make sure you follow him and you can keep up to date with what’s happening at Intersect and everything around these budgets. Now what we are keeping an eye out on at the moment is some of the

10:17
Leaks are coming out from the Cardano budget. So the budget is an annual budget with the various working groups and big projects out there looking for the funds to withdraw from the Cardano treasury. And I have to prepare you guys for this. We’re looking at millions and millions, if not hundreds of millions of ADA being pulled from the treasury. We have last look, it was 1.7 billion in the treasury.

10:45
These teams will be looking maybe to pull out a third of that ADA to run and operate Cardano over the next year. So this is something we need to prepare ourselves mentally for. And I know there were leaks of various other proposals last year that were asking for hundreds of millions of ADA and people were stamping their feet going, Hey, this isn’t right. This, this is way too much money. You’re going to drain our treasury even before we can start saving funds for it. But you know what?

11:14
These are actual other proposals that are out there are in the hundreds of millions. This is marketing of Cardano. This is working on the chain itself. This is big projects building some really cool innovative stuff. And it does take hundreds of millions of dollars to do so. And this is what we have to prepare ourselves for. And we have to work out whether or not it is worthy of withdrawal from the Cardano treasury. Now there is a big budget.

11:43
process going on right now and has been for the last six, seven months or so. So if you’re interested in seeing how much money is being withdrawn, what is being proposed in each one of these budgets, you can join intersect and have a look for yourself and be prepared for the numbers and get an understanding of what’s going through when these go up for vote and is out in the public. It’s probably one step.

12:11
behind where you should be if you’re really concerned if you are concerned about the budget and how much money has been withdrawn you should jump into intersect now and have your say. So it’s better to start contributing now then right at the end and kicking up a storm just before voting happens so please if you are wanting to be a part of this governance process and have your say with how much money should be withdrawn jumping to intersect at this point in time.

12:38
Now there there are some leaks of the various budgets out there and this is one particular budget that was being floating around for withdrawal funds from from the Treasury by IOG itself so this is Charles’s company looking for funding from the Treasury from the community to continuously build out the Cardano ecosystem. Now I thought I had plenty of funds plenty of money themselves.

13:05
From what I understand, they got a lot of funding from the foundation and what not. So it may not be the case. And they may actually do need additional funding to keep operations going. So these are all the things we need to understand. And hopefully we do see these budgets very soon so we can get up to speed with what’s actually going on and make really good informed decisions as DReps out there.

13:32
Now this was something really interesting and let me just read this for you. Top Cardano DReps are getting invited to a budget summit in Denver. That’s a wild interpretation of socializing the process. All ADA holders should have equal access to these discussions. Elected committee members are not able to participate fully. Hmm. I’m legit concerned. And yes, Jenny, I do share those concerns.

13:57
Top DReps being put into a room and influence in regards to how they should vote for the budget process. Hmm. Okay. That’s that’s one way of buttering them up and say, hey, it’s okay. Just vote for our proposals and let’s get things pushed through. I wasn’t one of those that were invited or maybe I was and I didn’t get the DMs. I have no idea what’s going on sometimes in this space, but it’s this is an interesting one. If people are.

14:28
getting invited and being spoken to about how they should vote. This just doesn’t really bode well with me. This isn’t really how governance should be working. Let me know in the comments down below. What do you think of this? I don’t even know if this is true because I haven’t seen any evidence of DReps being invited to anything of a summit, whatever it might be. All I know is that there is these regular budget

14:56
budget meetings that are online. So if you are interested in attending these workshops and these budget process meetings, you can join them online and contribute that way. So please, please do. Now with this, the Cardano whale, the big influencer in the Cardano space has stepped up to be a DRep himself, and he has put his hand up or his wallet up, I should say, to be a DRep. And now he is not so much campaigning, but he will be

15:25
putting in his input in regards to the budget and how it should be spent. So I believe he has a more conservative approach of budget usage, but let’s have a look here and see what his goals are. The number one decentralization will always be my top priority. Scatability and affordability. Kudanos must onboard the world and it must and it has to be for everyone. Fiscally cautious. Rigid and predictable monetary policy. Sustainable. Don’t spend beyond our means. The treasury is as much.

15:55
for future generations as it is for ourselves. Keep Cardano sustainable. The 45 billion fixed supply is our base. So I totally agree with all these particular aspects of the whale. So he is still remaining anonymous. He won’t be doxed, which is totally fine. But you can see his D-Rap profile on the govtools.website. I’ll put links to it below as well. So if you do want to vote,

16:23
or delegates your voting power to him. He’s currently at the 13.1 million ADA in terms of voting power. So he’s doing quite well for a couple of days of signing up as a D-Rep. Maybe that’s all of his ADA. I don’t know. I haven’t looked that deep. But he is definitely a contender in the space and someone that if you want to value the Cardano ecosystem, someone definitely that you can vote for. Now, if you wanna become a D-Rep or delegate to a D-Rep in the space,

16:53
There’s a lot of tutorials out there. I’ve made a whole playlist here that should cover pretty much all the wallets in the ecosystem. I’ve also got written tutorials on the Learn Cardano website as well. LearnCardano.io, links down below for you guys. Or just do a quick Google search, guys. There’s plenty of video tutorials out there from various creators and written tutorials from content creators in this space. So we’ve got Big Pay here. We’ve got a whole bunch of videos that I made. Cardano Spot’s got a listing at the top there.

17:21
and also stuff on the dev portal and Cardano forum. So lots of resources out there for you guys to get up to speed in regards to delegating or becoming a D-Rep and participating in Cardano governance. Now we have some comments around the budget process and money being distributed out to people. Bobcorn Ada here writes, how about instead of granting 300 million ADA to one entity, why not adopt a contract approach? We offer say one million ADA for proposals to build a lay-offs, kind,

17:50
kind of like a government infrastructure contracts, let multiple companies compete for it and the best offer gets the funding per project. That’s an interesting way of going about it as well. Now, Mr. Carter here writes, as it stands right now, what comes out next week will be the start of a multi-week process to put forward multiple budget proposals for each bucket that intersects have been talking about. It wouldn’t be one lump sum. So the way that it’s being proposed at the moment is that the projects wouldn’t

18:20
or the working groups, working committees will need to hit certain milestones. And over a time period, they’ll get allocated the funds as they go. So it won’t be the 300 million upfront, 200 million upfront, whatever they’re asking for will be done in stages. Some working groups such as events will need some of the funding up front to actually pay for the venues and bookings, et cetera, but, you know, we’ll work differently for different working groups. But the.

18:48
idea here is that it will be split over into milestones over a year. So instead of being dumped all the funds in one go, it would be split out so that it’s a little bit more sustainable and people can’t actually run off with the money along the way.

19:04
And people can’t just run off with all the money and spend it all in one go. I’ve also seen diagrams, et cetera, about how the funds are being managed and dispensed through the various working groups. There is one centralized committee that will be managing all those funds. So it’d be really good to see that be decentralized. And I know Paterfield or Patrick from Patrick Tobler from NMKR has been

19:31
And then eventually getting this into the smart contract phase, where smart contracts are actually distributing the funds based on Oracle feed. So Oracle feed output. So if this all ticks and is all approved from the oracles or from other external sources, then the funds can be released or even better a multi seed group. So multiple people need to approve the transaction and send those funds out. So rather than just one person, one entity controlling all the funds, we have multiple different groups.

20:00
that particular process and that would be really good to see as well. Now we know that the working groups are asking for funding. We also know that IOG is asking for funding, but there’s also other groups and projects such as Amaru, which is building a Rust based version of the Cardano node and this is from their Pragma group and they’ll be asking for funds as well. And this is one project that has been very transparent in regards to what they’re building.

20:29
What they’re asking for the whole budget process is very transparent but you can go through here and actually see what they’re asking for here so you can go through right now. And see what they’re up to and what they’re asking for and what they’re going to deliver in the end too so this is really good to see. So this is a comparison you can see comparison to the other similar projects that they are a compete not competing but comparing themselves to so this rust base of 8.

20:57
roughly $3 million for the development of this. 8 core devs, 90 contributors over two years. But these are the numbers that we’re seriously are looking at for what we want. And here, Cardano node, just to build Cardano in general. Look at this. They estimated it was at $20 million. So this is what the IAG team have been spending on building Cardano. $20 million US.

21:26
since 2017. But it’s an ongoing thing. They will constantly need more money, more developers to actually get this going. Now this is the estimated costs and contributions here. And it’s done in a little bit of a strange way. So it’s hard to work out the exact costings here, but I like how they’ve done it here. So they put it at FTEs, which is full-time engineers. So for the ledger, they need four, consensus three, mempool three, network two.

21:54
UTSRPC1 and testnet one. So 14 full time engineers plus the 60k worth of infrastructure costs. So that’s a service, etc. It’s a needed thing. And I’d love to see more diversity in nodes for the Cardano ecosystem, because it makes our chain, our Cardano node network more robust with different implementations of it. Now, as you can see, there’s a lot happening in the governance side of things on the Cardano space.

22:23
So make sure you hit that thumbs up, that like, subscribe, notification bell. I’ll keep you guys update with everything that’s happening in regards to governance and everything that’s happening in the Cardano space as well. I’ll see you guys in the next video.