Many of us have imagined the rules, culture and norms we would establish if we got to start our own country. No taxes! Universal Basic Income for all! Andre 3000 gets to write the national anthem! Yes, there will be flutes!
On Thursday, I experienced a once-in-a-lifetime chance to do (some of) that by participating in the refinement of a constitution. A collection of individuals from all walks of life sat in an office in downtown Toronto, and we poked holes in a document that would help govern our future. Only, it wasn’t for the country that we live in, or any country for that matter. There were 12 in our room, but we were a subset of millions of people. There were many groups like us, gathering over the last week in spaces everywhere on earth. Our task to set the guiding rules for the future of Cardano, ADA and the billions of dollars of assets currently locked onto the platform.
I will let you in on a collection of thoughts from an insightful day of chit-chats, arguments, networking and lots of coffee. But first, I think some context would be helpful.
I first got interested in Cardano in 2018, during a period of several years where I pored over whitepapers to try and get in on as many great ideas early. What impressed me was the academic rigour that the Cardano team pursued for every facet of what they were building, so I invested a good chunk of the modest funds that I had into it. I was also making YouTube content about crypto at the time, and I found that spending time in the ADA community was pretty rewarding. I enjoyed the conversation, and it felt good being part of a niche. When I started working in crypto marketing my research shifted towards Ethereum because that's where our clients were. But I watched with keen interest as ADA did its thing away from the limelight. I staked my ADA, used the odd dApp here and there, dabbled in CNFTs. I'm a user, but hardly a maximalist.
I have been getting more involved across the crypto space since my move to Toronto, and the monthly Cardano Meetups are something I look forward to. They are organised by George Brown College's Professor Lawrence Ley, and there's a healthy mix of people of all kinds. Students, academics, professionals, scientists and entrepreneurs. People from Canada and abroad. I think that cross-section really is a representation of the types of people who can not just find value on blockchains, but build it themselves. Here's the link to our Meetup group, come by if you're in Toronto.
Now that the intros are out of the way, here are some thoughts on the Toronto Cardano Constitutional Workshop.
Some of us (yes, me) were there to witness how a government is formed, and the checks & balances we are putting in place to ensure responsible governance. Everyone (in Web3 especially) has a thing or two to say about their government, and how they could run it better. Big government; more services! Small government; supply and demand will dictate how we develop! For anyone who’s thought of this for more than a hot minute, we can see the monumental challenges that lie in representing the interests of the millions who make up any network or constituency. If this is to be an improvement on our current democratic models, it needs to succeed where our current models have failed. Where one perceives these pros and cons is entirely shaped by their world view, and I am very interested to see how we iterate on and eventually codify our new understandings of governance.
I don't think the number of academics in our small gathering was a coincidence. This is a distributed network known for its focus on being thorough, and I was relieved we had a researchers who were conducting post-graduate and PhD degrees among us.
Why was I relieved? This is a massive experiment, and we are absolutely wading into uncharted territory. Rarely has an agreed-upon handing over of power like this happened in human history, and we need to study everything that will come of it. We need to understand the social dynamics encouraged by any system we put in place. Questions of what is possible with these systems are unlikely to be answered now, or even in several years. The limits of what this system can enable will need extensive studying.
This is a constitution, and the intention is for it to reflect the values of the communities. While it can be amended to best meet the needs of the participants, the idea is that this document will serve as an ideological north star. This is valuable when we consider future threats. AI and Quantum Resistance have been name-dropped in the documentation, and these are valid concerns. However, what makes me most concerned is not the tech, but the facets of the worst human impulses that can be enabled if we do not have sufficient guardrails. Which leads us on very neatly to the next section...
Since the Chang Hard Fork, the founders and core team no longer enjoy special privileges over the network, and will have limited influence in directing how the network grows. This also means that there are fewer safeguards than we are used to enjoying. Ensuring that there’s a critical mass of honest participants before full decentralisation was actively pursued by the ADA community. Seeing how few comparable projects from around the same time in active development today may be a sign that this was the correct move. Training wheels were needed while the tech that makes Cardano possible was being peer-reviewed. In time, control was slowly shifted into the hands of the users, until we reached our present day. While this slow and steady approach was shepherded in slowly, the next step is much more complex. Millions of individual minds, all with their own ways of seeing the world and the future of the network, will a say in shaping its future. I think this marks a watershed moment for Cardano where this global experiment is now more related to social sciences than computer sciences.
And as any social scientist would, we need to focus on the language, framing and considerations of the cultural implications of any actions that we take. What may be best for ADA holders in a rural anarchist farming community in North Africa will be very different for a hedge fund based out of the Caymans. Legal documentations are worded in that way for a reason - all claims need to be bereft of grey areas and means of malicious re-interpretation. A lot of our disagreements were around the use of words like “reasonable” & “necessary,” which were doing some heavy lifting when discussing fee structures and the allocation of Foundation resources. This needed to be included, but how does one quantify what is reasonable? Who has the final say in determining how this is quantified? Do we use flat fees or work on percentages? How will the responses to these questions change if ADA goes to 10 dollars? What if it stays at 10 cents for several years?
Since we are talking about price, another key discussion centred on the scarcity of the ADA tokens. Just like how there will only ever be 21 million bitcoin, ADA currently has a capped supply of 45 billion tokens. This constitution is intended to be in place for decades, maybe even centuries to come. With the rate of change in the world around us only increasing, the big questions is “will the current supply of ADA be enough to engage in the activities on the network in perpetuity?”
There were two very distinct camps in our group.
Group 1
ADA needs to be scarce, and unlike fiat currency we have many more decimal places. We have a social contract with purchasers of ADA at a certain price, that the supply is fixed. Should the unit value of each ADA reach prohibitively expensive levels, we can remedy obstacles to accessibility by add more decimal places.
Group 2
The more ADA that gets spent, the more is likely to become lost, inaccessible or locked. We have seen this on the bitcoin network, with assets on many legacy wallets not moving for several years. Many speculate that the owners have lost their keys, are deceased, or any from an endless list of unfortunate possibilities. This is just value on a network that will not be put to use, which ties back into one of the consequences of inflation - people invest their money in order to beat the depreciation of the cash they hold. Sounds very topical with the most recent 50 bps rate cut, with more expected around the corner - can looser monetary policy encourage further growth?
These questions tie into wider themes of financial stability of the network, including the long-term roles of the Treasury, Catalyst Grants and the inevitable influx of big-name players from the wider technology space. In short, how can we ensure that the network continues to provide value for existing participants while also keeping barriers to entry low enough to encourage new builders.
We finished the workshop by electing a representative to travel to Buenos Aires, Argentina, and vote to put the constitution into effect. Here’s the process, and I am very pleased that it was a ranked-choice vote. Ranked choice is increasingly being accepted as a fairer way to vote - since it can help shake the stranglehold that the two-party system has on the electorate. If you’d like more depth on this topic, check out this quick video.
1 - Registering 5 individuals who were interested in taking on the position.
2- Quick 45 second speeches about why they were the person you should vote for.
3 - Use the Menti platform to cast ranked choice votes - i.e. you rank the people in order of preference, with 5 points for your top choice and 1 for the fifth. The person with the most points is the elected representative who will be able to cast the vote, and the runner up is the travel partner who will assist in organisation activities.
We had a solid selection of candidates, all of whom were passionate about ADA. William ended up winning the election, you can follow him on X here. He's also a DRep, so reach out to him if you would like to delegate your voting power.
It was a 6+ hour gathering so I had to select which takeaways would be most widely applicable. Here are some of the axed topics, if you would like me to expand on any of these do let me know!
Who gets to vote? Only those who hold ADA in personal wallets? What about centralised exchanges? Who controls where their votes go? Do they serve as DReps themselves? How can we identify which wallets are personal, institutional or just held by high net-worth individuals?
Code of conduct for DReps, or ‘delegated representatives’ - who sets them, how do we ensure accountability? What criteria do we establish to ensure that DReps act in the best interest of their constituents? Should we have a set of no-brainer rules first, and then DReps can then add their own policy point to these docs?
Reached the end and still want to read more about Cardano governance and constitutions? Here’s the link to the constitution draft for you to pore over. I think we might get along.
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Marv
