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Cardano (ADA): IOHK to harness community power in 2021

  • IOHK will encourage participation in Cardano governance and is setting a 50% voter turnout goal for March 2021.
  • In the second quarter of next year, IOHK will support institutions and leaders that provide objective information to the community.

With consistent progress over the last few months and important advances in its main projects, Cardano is shaping up as one of the cryptocurrencies to watch in 2021. The CEO of Cardano’s development company IOHK, Charles Hoskinson, published a video on his YouTube channel in which he explores one of the most relevant components of the ecosystem: the community.

Hoskinson said that in 2021, they will try to harness the “power of the community and put them in the driver’s seat” to make the final leap from a federated system to a decentralized model. After Shelley’s deployment on the mainnet, Cardano is currently registering 1,200 stake pool operators which by next year will be responsible for producing 100% of the blocks on the network.

IOHK’s CEO noted that this will be an event that IOHK has been preparing for a long time. He added that they may already be giving control to the community. However, he said that IOHK has designed a strategy that he considers “unprecedented” in the crypto space. Therefore, the migration needs initially to go through a process of education about the changes that the network will have and “how it should be managed” in the long run.

In this regard, a key component of the strategy is Project Catalyst. Its goal is to teach the community about how they can participate and vote in the governance model. IOHK’s CEO added:

When we look at the first quarter of next year, our biggest goal is to maximize participation. So we want as many ADA holders as possible to vote and participate in Catalyst, to register and to have an opinion (…) We will make sure that the voting tools are improved and more inclusive. A big goal of that is to put it directly on Daedalus and have a voting center there (…).

Another goal is to increase the ADA involved in the governance model. Hoskinson said Cardano is the second largest cryptocurrency in terms of total staked supply at 64%. However, only a fraction use their power for voting. By March 2021, Hoskinson wants 50% of all stakers to vote.

What will Cardano’s governance look like in the medium term?

By the second quarter of 2021, the focus will shift from user participation in the voting system to analyzing how the governance model processes complex ideas. To do this, IOHK will look at the “systematic processes” that break down complex ideas proposed and which institutions and “thought leaders” can be supported to provide objective information to the ecosystem.

At this stage, convergence in decisions will be essential for “meaningful participation”. Hoskinson defined this as a state in the governance model in which users agree to accept proposed ideas because they have legitimacy based on the voting system.

On how the Cardano treasury and financing mechanism will operate, IOHK’s CEO clarified that it will have to “transcend vain metrics,” such as the price of ADA at any given time. This is a metric that cannot be controlled and responds to macroeconomic factors. Instead, Hoskinson proposes looking at other key performance indicators (KPI):

(A cryptocurrency) is not here to make you rich, it is here to be useful. There is a useful component. There is a component of growth and adoption. Then, there is a component of sustainability (…).

About Author

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Reynaldo Marquez has closely followed the growth of Bitcoin and blockchain technology since 2016. He has since worked as a columnist on crypto coins covering advances, falls and rises in the market, bifurcations and developments. He believes that crypto coins and blockchain technology will have a great positive impact on people's lives.

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