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Cardano Final Stage: CIP-1694 and the Promising Future of On-Chain Governance


Cardano, the popular blockchain platform, is fast approaching its final stage, Voltaire, which aims to transform the Proof-of-Stake chain into a self-governing entity. The fate of the Cardano government now rests on CIP-1694, a landmark proposal that seeks to empower communities. To influence voters, Cardano introduced attractive incentives and a unique solution called the “KtorZ tax”.

Cardano Decentralized Governance Vision:

CIP-1694 is key to Cardano’s goal of becoming the first decentralized blockchain protocol to be regulated and operated by its community. The fate of this proposal is in the hands of the people who will soon vote for its integration. Cardano is determined to strengthen the CIP-1694 case by offering attractive incentives to embrace this vision.

Addressing Challenges in On-Chain Governance:

Cardano’s on-chain governance is set for a significant overhaul, enabling anyone to submit governance actions. However, the proposed system faces the risks of manipulation and spam, presenting significant challenges. To address this issue, the Cardano Foundation technical director, Matthias “KtorZ” Benkort, has proposed a governance action fee or “KtorZ tax”.

Government Action Cost Proposal:

Benkort’s interim proposal suggests introducing an optional fee for submitting governance actions. Users will pay a minimum fee to validate and submit their proposals. This fee serves multiple purposes, primarily to ensure genuine proposal support and filter spam. The accumulated surplus fees will be distributed fairly among the participants based on their stakes, regardless of their voting preference.

Cost Benefit of Government Action:

The proposed governance action costs have great potential to revolutionize Cardano’s on-chain governance. This increases security and transparency and encourages participation. By introducing this fee, Cardano empowers users to shape incentives for those who vote on behalf of ADA holders. It also fights spam and encourages genuine contributions while encouraging an active and inclusive governance process.

Creating Fee Markets and Encouraging Active Participation:

The cost of governance actions creates a cost market, encouraging users to prioritize actions based on their value and impact. It also encourages active participation in the governance of Cardano. DReps (Decentralized Representatives) will allocate their time and resources based on the cost market, which further encourages the diligent performance of their tasks.

Cardano’s Decentralized Potential:

Cardano founder Charles Hoskinson believes that once CIP-1694 is completed in the summer of 2023, Cardano has the potential to surpass Bitcoin, Ethereum and other cryptocurrencies in decentralization. This ambitious vision reflects confidence in Cardano’s progress and the transformative power of its governance model.

Cardano’s final stage Voltaire draws ever closer to the fate of his government resting on CIP-1694. Cardano introduced governance action costs to gain support for this proposal, a solution to overcome challenges in on-chain governance. This fee provides incentives for genuine contributions, filters spam, and promotes an active and inclusive governance ecosystem. Cardano’s vision for decentralized governance is very promising, aiming to redefine the blockchain platform landscape.


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