Stake pool operations lie at the heart of Cardano decentralization, enabling servers to reach a consensus agreement across the network. Our groundbreaking Ouroboros proof-of-stake consensus protocol allows pool operators to reach agreement on the validity of transactions and sign a block, which is then immutably recorded on the Cardano blockchain.

On the Shelley path to decentralization, as more stake pools are created, the more the Cardano network grows. Operators form their pools, attract delegation, stake ada, earn rewards and take a small cut to cover their running costs before distributing the rest between the pool participants.

Node decentralization is a key element. However, to keep track of stake pool information and simplify the choice of a pool for delegators, it is crucial to ensure that information about each stake pool is relevant and valid. And, as far as is possible, that the influence of bad actors, such as potential attackers, spoof pools, and trolls, on the system is minimized.

Welcome to Smash

To address these needs, we have developed Smash – the server that supports operators and ada owners by validating information about stake pools and storing it as metadata.

Each stake pool is registered on the blockchain along with the information required to calculate rewards. However, stake pools also include metadata that helps ada owners to make a rational choice when delegating their stake. This metadata includes owner details, pool name, pool ticker, homepage, and a short description, which are not stored on the blockchain, and thus it is important to provide visibility and access to this information.

As well as ensuring that registered stake pools are valid, Smash metadata server helps to avoid duplicated ticker names or trademarks, and ensure that they do not feature content that Cardano users are likely to find offensive. Given that scams, trolls, and abusive behavior are an unfortunate part of life online, we had to find a way of filtering potentially problematic actors out of the playing field.

What is Smash?

Smash is a stake pool metadata aggregation server that was conceived to improve Cardano users’ access to verified stake pool information and make it easier to use the system. A Smash server can aggregate stake pool metadata, fetch it, and store it.

The first generation of Smash has been deployed by IOHK and provides information about delegation in the Daedalus wallet. Previously, this off-chain data was fetched by Daedalus from each stake pool separately, which required a lot of network connections and affected performance. All of this data can now be served from one server, hosted and fetched, initially by our team.

Although the Smash server is currently run by IOHK, it is important to note that the server code is open source and can be deployed by anyone. So we hope that in the future, the Smash approach will be adopted by the community for decentralized metadata. Daedalus will allow users to configure any server of their choice and browse custom stake pool lists – for example, charity pools, bare metal pools, or pools from a certain region for ada holders who would prefer to support stake pool businesses with a particular focus.

How does it work?

Smash is an evolving system. Currently, as its operator, we are responsible for the maintenance and metadata curation on the IOHK Smash server. Badly behaved stake pools can be delisted from display in Daedalus. Factors taken into account for such decisions include illegal or malicious metadata content, impersonation, the use of ticker names that were previously registered on the Incentivized Testnet (when this is not the same stake pool/operator), intellectual property rights violations, or stake pools that are no longer active.

While its most immediate impact can be seen in Daedalus, Smash is a resource to support the community. So if you identify a stake pool ticker that you feel might be causing harm and transgresses the guidelines, we encourage you to review the guidelines we have recently published outlining the reasons for a stake pool delisting and a step-by-step explanation of the delisting process. Get in touch if you believe there is a case to be made for removal.

It is important to ensure that there is a reason for a stake pool to be delisted and that if possible, there is a reasonable level of community consent. Thus, any request should include the rationale and any proof of violations. All requests are reviewed by the Smash operator. It usually takes seven days for a request to be inspected and processed, and we always respond by clarifying the motivation for any decision. Cardano is a decentralized ecosystem and aims not to limit any stake pool operation activity unduly or unfairly. We reserve the right to make the final decision regarding the Smash server we manage, however we aim to provide the community with as much visibility and trust as possible. For more details, please email smash@iohk.io or contact directly @benohanlon in Telegram.

Taking a decentralized approach to governance and decision-making is proving to be more efficient in many spheres than the centralized, authority-based model that became the norm in so many areas in the last century. At IOHK, we believe that blockchain technology offers a way to encourage participation in collective action. And we are building just such a system, so Cardano can grow in a fair and decentralized way, with an open governance system that encourages global participation by granting ada holders the power to make decisions.

Decentralization is core to global governance

As we’ve been working on this, the pandemic crisis has exposed weaknesses in our globalized economy and made it clear that everyone needs to reconsider the ways we collaborate in the face of challenging international situations. Over recent decades, the world has become ever more connected through digital infrastructure and social platforms. Therefore, robust tools and new behavior patterns are now necessary to improve the way we collaborate.

In the past, large collective challenges had to be solved in a centralized manner by high-level actors governing from the ‘top’ down. In that governance model, power, authority, and control were decided and exercised at management level. This could be a chief executive, a president, or even a dictator determining the ‘best’ course of action. In this centralized system, once a decision is made, it becomes the law of the land, and new behaviors are enforced. However, the top-down model is inefficient for solving global-scale challenges. Dr Mihaela Ulieru, an adviser on digital ecosystems organization and transformation, spoke at the recent Cardano Virtual Summit about her vision of ‘bottom-up’ organic governance. There, she pointed out that hierarchical structures are rigid and less productive. Furthermore, they cannot deal efficiently with emerging complexity.

A centralized governance model depends on the limited knowledge, expertise, and understanding of a single individual or a body of actors. Decisions must then proliferate through the system to deal with emerging problems. This generates an inflexible response that lacks on-the-ground information from the people affected by a particular event. Therefore, the more complex and widespread a problem is, the less prepared a top-down organization can deal with it in a way that works for most people. So the question arises, how do we create a system that responds to emerging problems, aids decision-making, and remains all-inclusive?

Dr Ulieru reminds us that the bottom-up approach has been used in peer-to-peer networks to great effect allowing network participants to collaborate in a way that is reflective of the desires and needs of the community. SoScial.Network, launched by Jon Cole after Hurricane Harvey hit the southern US in 2017, is one example. This network enabled people and communities to gather and offer help to each other by providing aid to disaster victims. Another social network, ChefsForAmerica, delivers food to hospitals, the disadvantaged, and those in need. AgeWell created a peer-to-peer care delivery model that improves the well-being and health of elderly people, keeping them in their homes, while reducing their healthcare costs. Such activity, organized by individuals in a decentralized manner, can solve challenges faster and collaboratively.

Cardano decentralization

For effective collaboration on decision-making, Cardano offers a decentralized network built on a blockchain for a higher level of security and transparency. It takes the networking peer-to-peer concept further and builds it into a global infrastructure. For Cardano to establish a solid governance model, it is important to ensure that everyone can participate in a transparent, accountable, and responsive way. As decentralization empowers individuals and communities to take action and collaborate, anyone can suggest a change, or an activity to be initiated, whether this is for social good or for technological progress.

The question is, how to decide which change is crucial and what exactly will benefit everyone? Crucially, who will pay for its realization? To solve these issues, Cardano is establishing a global voting and treasury systems for funding the blockchain long-term development. Hence, decision-making and funding are two crucial components of governance. At IOHK, we worked to solve these issues and to provide the tools to empower decentralized governance and improve all our systems.

Voltaire and ada holders

For Cardano, a decentralized governance model should grant all ada holders the ability to decide what changes should be made for the ecosystem to grow and mature. When building an ecosystem for the next century rather than the next decade, the self-sustainability of the network becomes vital. Since individuals in the Cardano ecosystem are most affected by the decisions made about the protocol, it is important for them to understand how those decisions are made and how they are paid for, as well as how to participate in that process.

Voltaire is the era in Cardano development that deals with decentralized governance and decision-making. Voltaire focuses on the Cardano community’s ability to decide on software updates, technical improvements, and project funding. To provide the final components that turn Cardano into a self-sustainable blockchain, we need to introduce:

• A treasury system: a continuous source of funding to develop the Cardano blockchain.
• Decentralized software updates: the process enabling decentralized, open participation for fair voting on decisions about system advancements.

In line with that, IOHK’s engineers are implementing tools and social experiments to enable Cardano’s governance framework. Hence, we are working on:

• Cardano improvement proposals (CIPs): a social communication system for describing formal, technically-oriented standards, codes, and processes that provide guidelines for the Cardano community in a transparent and open-source way.
• Project Catalyst: an experimental treasury system combining proposal and voting procedures.

Project Catalyst focuses on making the treasury system a reality by establishing a democratic culture for the Cardano community. This goal will be achieved by a combination of research, social experiments, and community consent. Catalyst enables the community to make proposals, vote on them, and fund them according to their feasibility, auditability and impact.

It is important to note that everyone has an equal right to propose changes and system enhancements, and that everyone is encouraged to collaborate on innovative and powerful proposals.

To ensure that everyone gets a say, we are establishing a ballot submission system where people can propose improvements. This may be a proposal to sustain a system, to market it, or perhaps a suggestion to improve an existing protocol. In addition, IOHK wants to enable our community to create products or applications aimed at solving challenges within the market.

To suggest such contributions, people can submit ballots to the community. After the ballots are submitted, voting will decide which proposals can move forward.

Voting is the exercise of influence to decide which proposals get accepted or rejected. Only by encouraging everyone to participate can we ensure that preferences are determined in a democratic way. The value of Catalyst, though, lies not only in the technology improvement, but also in enabling the community to learn how to collaborate, make good decisions, and essentially, generate great proposals. So, decisions are taken through a robust set of voting protocols that we are developing. These will be evaluated by the community with the help of members who can put themselves forward as ‘experts’ to help explain proposals.

Although any ada holder can submit a proposal, the voting power of an individual is proportional to the amount of ada that is ‘locked’ into the system when people register. By voting, participants will influence decisions on which proposals to fund for network development and maintenance. This could also lead to the creation of educational materials, marketing strategies, technical improvements processes, and many other ideas.

Another feature of Catalyst is privacy. As in any political elections, this is key for preventing voter coercion and helping defend against corruption. So, Cardano is looking to implement a zero-knowledge proof for each vote. This cryptographic technique grants privacy by allowing the vote to be verified without it being publicly revealed.

The treasury funds proposals

A crucial aspect of a self-sustainable network is understanding who will fund decisions and proposals. To meet these needs, Cardano is introducing a self-sustainable treasury system to fund blockchain enhancements and maintenance. The main sources of capital will be refilled every epoch from a portion of stake pool rewards, and later from minted new coins, the percentage from fees, and additional donations or charity.

Project Catalyst will maintain this constant source of funding. A steady income stream will support initiatives and improvements proposed by ada holders, while at the same time rewarding and incentivizing people who dedicate their time and effort to making productive decisions. This will enable the establishment of a decentralized system that promotes participation, collaborative decisions, and incentivization. Besides the funding purposes, Catalyst ensures that funds are used well, facilitating the flow of information so the community is able to assess proposals while addressing the most important needs of the ecosystem.

IOHK is building a decentralized financial system that can address the world's needs. Voltaire is the first step in this direction. Using a collection of concepts, tools, and experiments, we are creating a fully decentralized ecosystem that will democratize our blockchain, and open it to the world.

Want to help shape the future of Cardano? Project Catalyst is looking for 25 community members to join a focus group on the direction of the program, pitch their ideas, and test the platform and voting. If you have an idea that might be suitable for funding, or would like to join a panel assessing community ideas, apply today! Please ensure you have a Telegram and an email account to apply by midnight UTC on Friday, August 7.