Voltaire and the path towards decentralization

Cardano is considered one of the largest smart contract platforms alongside Ethereum and Solana. As part of the Cardano Roadmap, a lot of efforts have recently revolved around Voltaire – an era that wants to implement modern governance approaches on Cardano. How Cardano develops through Voltaire.

Cardano: Under the wing of Voltaire (CIP 1694)

Cardano’s idea of ​​equal network participation begins with the peer-to-peer oriented PoS protocol Ouroboros. Everyone should be able to delegate their ADA as easily as possible without giving up control of the tokens to a third party.

But if Cardano founder Charles Hoskinson had his way, cryptocurrencies are still too closely linked to traditional currency structures:

“The moment we can digitize the treasury, it’s game over for the banks,” he wrote in one Tweet Beginning of the year.

With the Voltaire development stage, Cardano wants to put words into action: The voting and treasury system should be gradually decentralizedto create a completely new economic structure.

Decentralized voting system

With the Cardano voting system, ADA stakeholders on the blockchain should be able to vote democratically on system updates. Decentralized organizational forms with voting guidelines and entire management bodies should be formed.

For example, a kind of constitutional committee is being considered, delegate representatives elected by ADA ballot (dReps) and stake pool operators (SPOs), with the latter being responsible for the technical resources.

The end of the roadmap with Voltaire marks the beginning of a self-developing network, in which the IOHK company transfers the management completely to the community.

Decentralized Finance System – Cardano Treasury & Project Catalyst

Also the financing system to which the Cardano Treasury counts, should be managed by the community.

Through a voting process, the network participants can then decide for which project developments the reserves from the treasury will be used. The network intends to become less dependent on external financing and instead finance itself via the treasury.

The reserves probably arise from a combination of Staking reserves and transaction fees: With each block, the pool operators have to pay a certain tax rate of the income to the treasury.

As a result, the ADA supply increases with each epoch, with funding accumulating in the treasury as the ADA price increases. The more Cardano is used, the more revenue and taxes would be collected, which is believed to be the declining reserves to balance.

Next to it, Cardano shouted with the Project Catalyst launched a decentralized innovation fund. Every few months, funding is released from the fund for the winners; the community votes on the submitted ideas via ADA. There are 50 million ADA available for the currently active rounds 10 and 11, worth $16.5 million and $18.5 million, respectively.

Cardano positions itself: more decentralized than Ethereum, more moderate than Bitcoin

The Cardano founder is known for his polarizing statements and has repeatedly spoken out in the past Ethereum developers, Bitcoin advocates or the XRP community. When it comes to governance, Charles probably represents more “decentralized” solution strategies for Cardano than Vitalik Buterin for Ethereum. Vitalik’s point of view is that of a “lonely samurai,” he is said to have once said.

Charles’ messages are having an impact: Cardano is increasingly positioning itself, which could have a decisive advantage, especially given the high competitive pressure.

Nevertheless, above all the competitive cockfights is the vision of a freer economic and financial system, which, governed by its “network citizens”, could enable not only Cardano but the entire industry to grow together; provided that common ground rules emerge to move value between ledgers. Or as Charles called it: the required “Bluetooth or WiFi moment“.