Cardano Foundation & Project Catalyst F13: Follow Up

Our Catalyst participation and the Voltaire path

The announcement of the Cardano Foundation’s participation in Project Catalyst has created a large discussion in the Cardano Community. We welcome and take seriously all the feedback over the course of the last week, even where we may disagree. In the following, we want to follow up on Catalyst, further elaborate on our actions and also address some of the unrelated questions about the Cardano Foundation. We have collected the most recurrent questions on X and provide summary answers and clarifications for future reference on the Cardano Forum. There will also be a Q&A with myself later this week to address further questions.

On Project Catalyst and the Cardano Foundation

Since its inception, Project Catalyst has been a sandbox for Cardano governance. It has fostered community engagement on the topics of stake-based resource allocation and coordination of over 270M ada to projects in just over four years. The Cardano Foundation has actively engaged in Project Catalyst since 2021 by participating in various funds, including F12, F9, F8, F7, and F4.

Since 2021, the Cardano Foundation has highlighted key challenges in Project Catalyst, including low participation, inefficiencies in UI/UX for proposal submission, and inadequate follow-through and accountability on impactful proposals. While Project Catalyst has undertaken efforts to improve some of these points and received Catalyst funding for it, we still have significant concerns regarding the fact that the overwhelming number of high-quality proposals, especially from new entrants to the Cardano ecosystem, do not receive support. Furthermore, we continue to believe that the governance risks of the current voting implementation need to be addressed, alongside a mechanism to mitigate the more recent involvement of large DeFi protocols. These challenges are reflective of the complexities inherent in a permissionless proof-of-stake system, where one ada equals one vote.

On our Catalyst Participation

For F12 and F13, the Cardano Foundation communicated via a keynote the desire to increase its impact and participation in Project Catalyst during the Launch of F12 in Barcelona. On 9 December 2024, the Cardano Foundation published the list of Catalyst F13 proposals, which it voted on with 180M ada of voting stake. With our vote, we wanted to double down on the topics of long-term sustainability, decentralization and governance for Cardano. These principles are exemplified by the projects we chose to support. We initially considered and preferred an earlier announcement date. However, to avoid overshadowing the Constitutional Convention in Argentina, a significantly more pivotal event, we chose to delay, recognising the importance of allowing full attention to that discussion.

While we appreciate that the determinative nature of the Cardano Foundation’s is controversial, the results highlight the urgent and dire need for greater participation, especially as the Plomin Hard Fork approaches and Cardano governance is to be tested at a new scale in relation to the treasury. The impact a large player may have when there is minimal participation is striking in Catalyst and could be much more serious when the same model is deployed for Cardano governance as a whole. With only 4.8 billion ada registered to vote in Project Catalyst out of 35 billion in circulation, the Cardano Foundation’s stake represents about 3.75% of the registered stake and 0.5% of the total circulating ada. However, typically, not all registered stake participates in voting, and even among participating stake, not all are deployed to vote on every proposal across all categories due to the extremely high number and insufficient vetting of proposals.

The Voltaire Path

Going forward, we commit to providing improved clarity and predictability regarding our voting in Project Catalyst, including how much ada we will vote with and our criteria. When making this decision for the next round, we will take into consideration the various viewpoints expressed from across the ecosystem. We encourage other large stakeholders to do the same. We will also publish a technical blog on how we conducted our vote using community tooling, including Project Catalyst’s audit tool.

On the improvements of community funding mechanisms hope that Intersect will become the forum through which many of these discussions can be channeled, especially given one of the 2025 proposed Cardano goals outlined by the Cardano Product Committee at Intersect is to improve funding mechanisms for Cardano including, but not limited to Project Catalyst.

The Cardano Foundation looks forward to moving into our new joint governance future. We will continue to ceaselessly drive strong community projects and live up to our role as an active governance participant.

Read FAQs here.

16 December 2024

Frederik Gregaard
Chief Executive Officer