The second-largest proof-of-stake (PoS) network, Cardano (ADA), is getting closer to the Voltaire Era, or the last phase of its decentralisation. The system of its governance needs strong catalysts in order for its processes to be viable and balanced. One of them is what Benkort calls a “governance action tax.”
Cardano (ADA) DReps will be compensated for their contribution: CF tech director proposes tax
Deposits for the Cardano (ADA) governance proposal, or the ADA stakes needed to submit the proposal to alter the tech architecture, may be replaced by “governance taxes,” one-time payments the proposal’s authors will be obliged to make. The Cardano Foundation nonprofit’s technical director, Matthias Benkort, put out such a modification yesterday, on July 4, 2023.
The plan, dubbed “KtorZ’s Tax” by some Cardano (ADA) supporters, aims to establish workable incentives for DReps’ activities. According to the suggestion to change the original CIP-1694 version, the tax can be implemented as a “configurable minimum fee.”
If approved, the additional fee can encourage delegates to carry out their responsibilities under Voltaire’s decentralised government, according to Benkort:
This opens the possibility of introducing DReps incentives via off-chain protocols and social structures.
The commenters on his Twitter account are in favour of the plan since, according to them, it would only filter legitimate and sensible suggestions for Cardano (ADA) design changes.
CIP-1694 activation is set to enhance Cardano (ADA) decentralization
Additionally, options for the cohabitation of action tax and deposits are of interest to certain enthusiasts.
The Cardano Improvement Proposal 1694 opens up incredible possibilities for decentralised governance on the blockchain, as previously reported by U.Today. It establishes a balance between the authority of constitutional committee members, delegate representatives, and stake pool operators (SPOs).
In turn, this balance is designed to hasten and quicken the proposal approval and implementation process and stop ADA whales from taking over Cardano (ADA).
