CPS-????: Proportional Fairness in Stake-based Voting

[qinwang-git]

Summary

This CPS identifies fairness issues in Project Catalyst's stake-based voting mechanism where single large stakeholders can unilaterally determine outcomes.

Key Evidence

• Based on empirical data from Fund13: one proposal received 196M votes with 92% from a single whale
• That single voter determined outcomes for multiple proposals, overriding thousands of smaller stakeholders

Authors

• Qin Wang (CSIRO Data61)
• Yuzhe Zhang (CSIRO Data61)
• Manvir Schneider (Cardano Foundation)
• Davide Grossi (University of Groningen & University of Amsterdam)

Request

• Requesting CPS number assignment

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(rendered latest version of CPS)

[rphair]

@qinwang-git I've read your problem statement, and can understand the argument for what you are recommending, but there is nothing that can be done with this in the CIP process. The behaviour & personal choices of Project Catalyst (and all funding governance) are outside the CIP process scope... there would be no obligation for the Catalyst team to do anything about this problem statement: or even to read it, let alone officially acknowledge it.

We do have in our PR queue some technical submissions from the Catalyst technical architects (currently in Draft for a long time) but they are offered in the other direction: from Catalyst processes that may also be of use to the general community. But there is no way a CIP or a CPS can ever impose choices on Catalyst like what you've recommended.

In case there is any perceived doubt I'll tag the other editors (@Ryun1 @Crypto2099 @perturbing) but plan to close this as being entirely "out of scope" for the CIP process. I feel the best place to post this material would be on the Cardano Forum in the Catalyst category. I know that quadratic voting is in the works as a parallel measurement in Fund 14 and the other readers in that category may have more practical suggestions about the right place to submit your ideas.

[stevenj]

I am the Lead Architect in Project Catalyst, so we can consider that its Officially Acknowledged, and Read. 😄
But yes, @rphair is correct otherwise about the CPS process and Project Catalyst at large, I did only notice this because it was bought to my attention.

Re the issue at hand, this is a recognized issue inside Project Catalyst, and we are taking concrete steps.
In F14 we will be using Quadratic scaling on the voting power, and in later funds we will also have available the option for time weighted stake. These will be options, because different categories may have different rules applied.

Please note fund parameter A18 at https://docs.projectcatalyst.io/current-fund/fund-basics/fund-parameters which apply to all categories in Fund 14.

On Github you can also reach out to us via: https://github.com/input-output-hk/catalyst-voices/issues
or https://github.com/input-output-hk/catalyst-voices/discussions

And otherwise you can also communicate directly with the Community and Project Catalyst via the regular Catalyst Town Halls.

[stevenj]

@qinwang-git I assume this CPS is part of this proposal: https://projectcatalyst.io/funds/13/cardano-use-cases-concept/proportionality-in-stake-based-voting?

An observation I can make is the problem you identify is not unique to catalyst, on-chain voting for governance actions has similar issues. Therefore, a CPS could be directed more to the on-chain side of the issue, as could a CIP in how proportional fairness might be done on cardano for governance votes. And certainly whatever results you produce I will be very interested in if we can apply them for Catalyst.

[qinwang-git]

Thank you, @rphair and @stevenj, for the detailed feedback and clarification. I appreciate the guidance. At the same time, I’m encouraged to hear that the proportional fairness issue has been officially acknowledged within Catalyst, and that steps such as Quadratic Voting in Fund 14 are already underway.

Yes, as noted, this work is part of our proposal in the Catalyst Project (Fund 13), where we have been formulating the approach and aiming to provide a concrete solution. Our work could also be extended to broader on-chain voting mechanisms for governance actions.

So, do you think it would be more appropriate to revise this CPS (updated with new commits) into a broader on-chain governance problem to align with CPS discussions (on governance)? Or should we close this PR and move the discussion entirely to Catalyst Voices? (One concern I have is that Catalyst Voices also contains many development-focused issues rather than research-oriented topics).

P.S.: We have also reworded a few descriptions in the README.

[rphair]

@qinwang-git thanks for asking... as referenced already in #1074 (review) we've ruled "human factors" and "budget" considerations out of the CIP process. You can follow that discussion here at its tentative conclusion (though it won't be finalised until one or more the CIP editors writes & commits a new Governance category CIP, which is long in the works & just awaiting dedicated editor time):

• New Category: Governance #937 (comment)

So if you have a CPS about voting algorithms applicable to Cardano's on-chain voting — written in a way that entirely technical CIPs might derive from it — and with neither CPS nor any anticipated CIP containing, nor expected to contain, rules about what human beings must do in your specification — then yes you could feel free to formulate and (re)submit it here.

Otherwise, it would be best to take your overall design & recommendations to Catalyst Voices rather than proceeding through the CIP repository.

p.s. I'm putting this in Draft mode while you decide whether these criteria can be met. If you believe they are met — either now, or after some modification — please say so and take it out of Draft status and I'll tag it for Triage at the next biweekly CIP meeting. If you decide it's ineligible then please also say so and then you or one of the editors can close this.