Comparing Governance Models: Polkadot vs. Cardano
When talking about Web3, there is one thing that differentiates it from Web2 the most. Open, inclusive governance for all token holders.
Both Polkadot and Cardano are decentralized infrastructure projects that allow their users to participate in the governance thus shaping its very future and development. Let’s compare two different paths, on how these two projects focus on governance and let the people do what they should in all decentralized protocols and projects. Vote, build, and decide.
Content
- Introduction
- Unveiling the Decision-Making Process: Governance Structures
- Proposal and Implementation Process: A Tale of Two Approaches
- Community Participation and Engagement: Cultivating a Collective Voice
- The Current State of Governance Landscape: Progress and Potential
- Conclusion: Shaping Tomorrow’s Blockchain Landscape
1. Introduction
Both Polkadot and Cardano, key players in the Web3 revolution, champion decentralized governance through token holding. Besides governance, tokens are necessary also for securing the network. Cardano uses Proof-of-Stake (PoS) consensus mechanism and Polkadot Nominated Proof-of-Stake (NpoS), where staked tokens secure the network. Let’s dive into the topic starting with a short introduction.
Polkadot
Polkadot is a Layer-0 protocol, creating ground for other blockchains to thrive, providing them with infrastructure and robust security. Polkadot is currently transitioning to Polkadot 2.0, introducing a dynamic “coretime” market where parachains (application-specific blockchains) purchase computing power on demand. This allows projects like DEXs or NFT marketplaces to scale their needs dynamically, unlike the previous fixed 2-year slot auctions.
Imagine a prediction market that doesn’t need to have finality every 6 seconds, but rather longer. On the other hand, a DEX with a new listed token could need even more cores to handle higher traffic, or an NFT appchain doing a huge NFT mint, might need some more throughput as well for a limited amount of time.
Cardano
Cardano, in contrast, is a Layer-1 blockchain that prioritizes robust security. It utilizes the Haskell programming language, renowned for its formal verification capabilities, alongside a meticulous research-driven development process. This layered architecture, akin to a secure highway, fosters the stability and correctness of smart contracts used on the L1 or its sidechains. This is where the two blockchains intersect, as the intention is to make the Cardano Partner Chains interoperable with the Polkadot parachains using the Polkadot SDK, the first example of all is Midnight Network.
2. Unveiling the Decision-Making Process: Governance Structures
Polkadot
Embraces an OpenGov approach, a permissionless, on-chain governance system. This grants all DOT token holders the power to directly propose and vote on referenda using their tokens. These referenda can encompass a broad spectrum of decisions, from altering core protocol parameters to directing treasury funds for specific projects in specific tracks. This direct democracy empowers the community to actively shape Polkadot’s future.
Cardano
Cardano’s path to decentralized governance unfolds in two key phases.
Project Catalyst serves as a vibrant launchpad, empowering ADA holders to vote on proposals for funding. These proposals can be anything from technical development to community outreach, fostering a rich ecosystem around Cardano. But Project Catalyst is primarily about funding allocation, not core protocol changes. Also, it focuses on smaller spending, let’s say in thousands of USD, not millions.
The system is evolving further. IOG is currently building Catalyst Voices, an open-source platform designed to replace the current Ideascale Web2 platform used in the first 12 Funds. This signifies a move away from a gated, non-continuous mechanism that releases funds three times a year.
The true evolution lies in Voltaire, Cardano’s upcoming on-chain governance system. Imagine a future where you directly vote on proposals using your ADA, similar to Polkadot’s system. Don’t want to vote directly? Delegate your power to trusted representatives!
Voltaire will open the entire Cardano treasury for the community’s use, with a whopping €450M compared to Polkadot’s €300M treasury. This empowers the community to drive Cardano’s future in a more substantial way.
3. Proposal and Implementation Process: A Tale of Two Approaches
Polkadot
Polkadot embraces an open and transparent proposal process. Anyone holding DOT tokens can submit a referendum in various tracks depending on the amount and purpose of the proposal. Tracks are divided by value into:
- Treasurer (1M DOT — 10M DOT)
- Big Spender (100k DOT — 1M DOT)
- Medium Spender (10k DOT — 100k DOT)
- Small Spender (1k DOT — 10k DOT)
- Big Tipper (250 DOT — 1k DOT)
- Small Tipper (up to 250 DOT).
There are also some other specific types of referenda such as Root or Referendum Killer, but we won’t focus on those in this article.
The community then votes directly on these referenda in a 7 to 28-day period, based on the track. The time of the proposal approval might be shortened based on the size of the DOT participating and the vote conviction (0,1x — 6x).
After the referenda meet the approval criteria, being over 50% in favor, then follows the Confirmation Period, which can take up to 7 days. After that, the referendum is Executed.
Cardano
Cardano employs a multi-phased approach by integrating a peer-review process in the proposal where community members are rewarded for providing proposal assessments that are based on specific criteria.
Once proposals are assessed and assessments are ranked, the proposals are presented to the community through Project Catalyst Voting. This measured approach ensures well-considered Proposal QA but may potentially lead to a slower implementation pace compared to Polkadot’s direct democracy.
4. Community Participation and Engagement: Cultivating a Collective Voice
Polkadot
Ideas take flight on the Polkadot Forum, where anyone can propose and refine ideas, not necessarily leading to further proposals.
After community discussion through platforms like Polkassembly or SubSquare, these proposals become referenda for DOT token holders to vote on directly, shaping Polkadot’s future. For mobile use, there is also a solution from Nova Wallet, where the UI for governance is really user-friendly.
Cardano
The Voltaire era proposes a multi-layered approach with checks and balances. Proposals will require approval from at least two groups: a constitutional committee, delegate representatives (elected by ADA holders), or even stake pool operators. The key? “One ADA, one vote,” ensuring a fair and democratic process that shapes Cardano’s future.
Cardano also fosters inclusivity through above mentioned Project Catalyst, which functions more like a community-driven funding platform than a traditional VC fund. Community members submit ideas, which undergo expert review and then face a vote by ADA holders. Similar to OpenGov, this direct voting system empowers the community to decide which proposals are funded, bringing their visions to life.
5. The Current State of Governance Landscape: Progress and Potential
Polkadot
Polkadot’s OpenGov, an improved governance system that eliminates centralized elements of the Council or Technical Committee, was implemented in 2022. Since then it has transitioned from concept to reality, where the community actively participates in hundreds of referenda already proposed and voted on — a testament to the system’s functionality. And like in every democratic system, there is no need for drama between voting parties. But with solid discussion and in a decent tone, as it should be.
User-friendly interfaces like Polkassembly, SubSquare, or Nova Wallet for mobiles make voting accessible, further bolstering community engagement.
The latest update of OpenGov is the creation of Decentralized Voices, several entities provided by the considerable voting power, delegated by the Web3 Foundation, which stands behind Polkadot’s code. It’s a nice experiment, to provide those who care about decentralization and the good of the network with greater authority, more responsibility, increased agility and even more proper due diligence than before.
Cardano
Cardano’s journey toward decentralized governance unfolds in two distinct phases as mentioned above. While Project Catalyst serves as a foundation for Cardano’s future governance ambitions, the full realization awaits the arrival of Cardano’s Voltaire era, promising a comprehensive on-chain governance framework.
Voltaire marks a pivotal moment in Cardano’s governance evolution, anchored by CIP-1694. This proposal paves the way for a comprehensive on-chain governance system akin to Polkadot’s model. Cardano Governance has its own testnet. Cardano Foundation’s successful community vote on minPoolCost parameters from 340 ADA to 170 ADA demonstrates progress towards on-chain governance.
Voltaire era started in early 2023 and the goal is to finish it at the end of the roadmap, right after the Basho era focusing on scaling, getting finished in Cardano this year.
6. Conclusion: Shaping Tomorrow’s Blockchain Landscape
Both Polkadot and Cardano champion decentralized governance, but their approaches diverge significantly.
Polkadot’s OpenGov empowers DOT holders with direct democracy, fostering rapid innovation through a permissionless proposal and voting process. This strength facilitates rapid adaptation and allows the community to directly influence the evolution of the platform. A potential weakness, however, is the influence of large token holders/whales, who can sway voting outcomes.
The introduction of the Decentralized Voices program aims to mitigate this concern by delegating voting power to active community members, fostering a more balanced decision-making process, and detecting grifters.
Cardano, on the other hand, prioritizes careful consideration and a phased approach. The upcoming Voltaire phase, built upon CIP-1694, promises a robust framework.
Similar to Polkadot’s Decentralized Voices, Delegate Representatives will empower balanced decision-making through delegated voting, which is obviously a strength.
However, challenges remain. Full on-chain governance with CIP-1694 is still under development, potentially lagging behind Polkadot’s established system. Additionally, while Intersect now shares control with the development team, the weakness is that true decentralization awaits the successful implementation of Voltaire, coming later this year.
The Verdict: No Easy Answer
Deciding which model is “better” depends on your priorities. Polkadot thrives on rapid innovation and community empowerment, ideal for those seeking a dynamic and adaptable platform. Cardano prioritizes stability, academic approach, and long-term planning, appealing to those who value a more methodical attitude.
But both projects depend on the cultish leaders, both Ethereum co-founders, Gavin Wood in Polkadot and Charles Hoskinson in Cardano. But they both try to cut the roots by more decentralization involved, Polkadot seems to be a bit faster in that.
Ultimately, the success of both models depends on responsible community participation and a dedication to continuous improvement. As both Polkadot and Cardano refine their governance structures, the future of blockchain will be shaped by the active voices of their communities.
If you like this article, then:
- Follow Polkadotters on Twitter
- Delegate your DOT or KSM to Polkadotters for easy participation in the on-chain governance via Talisman or Nova wallet.
- Strengthen Polkadot by nominating your DOT tokens to Polkadotters Shrimp and Polkadotters Octopus
