DAOs with a significant ADA balance in Agora treasury can't vote on Cardano Governance proposals with their stake, nor use Agora Effects that use Plutus V3 with governance actions.
This is the total amount allocated to MLabs + Clear Contracts -Agora dRep Effect Validator.
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Implementing V3 Agora dRep Effect for DAOs to vote on Governance proposals in fully permissionless way without delegating their stake to a centralized party. GAT V2 to V3 upgrade. Clarity.vote update
No dependencies.
The specifications and validators will be accessible as open-source; however, the offchain code will remain exclusive to Clarity's proprietary backend.
We intend to license under the Apache 2.0 License. This permissive licence allows for broad use and modification while providing clear attribution and disclaimers.
Problem
During Chang hardfork Cardano introduced protocol level governance, however, DAOs that use open source Agora governance framework do not have a way to interact with that directly. The only solution available now is to delegate to a centralized dRep, which goes against the idea of community-managed DAO treasury. We propose expanding the Agora framework with an additional set of validators that will allow DAOs to vote for a way they want to participate in protocol-level governance.
Compatibility of previous Plutus versions (V1 and V2 at the time of writing) with V3 version and governance actions added in Chang hardfork is not straightforward. A transaction that includes a vote on Cardano proposal cannot execute a V2 validator. This imposes a problem for DAOs that use V2 versions of Agora base scripts. Specifically, GAT (Governance Authority Token) minting policy, which governs all effects (actions such as withdrawing from DAO treasury, voting on Cardano proposals, etc.) execution, is the problematic one in this case. It is not possible to use GAT tokens to authorize effects that vote to governance actions, which would involve burning GAT tokens and voting the same transaction. Our approach is to implement a proxy validator that will upgrade GATs from V2 to V3 if that is required by the effect so the upgrade remains fully onchain with no centralized parties involved.
The impact will be demonstrated by a successful integration with clarity.vote, enabling practical use in governance proposals and voting for both existing DAOs and new organizations in a seamless way without the need to upgrade the whole set of Agora validators to V3, which would effectively require bootstrapping new DAOs.
Solution
We will implement a suite of validators to enable DAOs to interact with Cardano’s protocol-level proposals and to opt-in for upgrade GAT tokens to V3 for effect that require them
Chang hardfork allows both individuals as well as scripts to become dReps that can propose Cardano proposals and vote on them. In the Agora ecosystem, this will be the validator that receives a GAT token after the Agora proposal has been successful. Here, it acts as three validators at once. It allows for dRep registration as Certifying validator, governs spending, and thus burning, of GAT as Spending and also can be executed with new Plutus V3 Voting purpose to cast votes on Cardano proposals.
To allow DAOs that use V2 versions of Agora scripts to execute V3 voting effects, we will implement a proxy spending validator and a minting policy to enable V2 to V3 GAT upgrades. It will force to burn a V2 GAT and mint a new V3 GAT and hand it over to the voting effect, or any other V3 effect as the implementation will be generic to enable other developers to write their own V3 effects without the need for everybody to roll out their own migration system.
Market
By enabling DAOs to interact directly with Cardano’s protocol-level proposals, the enhancements could drive greater adoption of the Cardano blockchain. This increased usage can lead to higher transaction volumes and greater demand for ADA, Cardano’s native cryptocurrency.
The new functionalities will empower existing DAOs to operate more efficiently and effectively, potentially leading to an increase in the number of DAOs and their activities on the Cardano network. This can create a more vibrant and active ecosystem.
By reducing reliance on centralized dReps and enabling more decentralized governance, the enhancements can strengthen the overall decentralization of the Cardano network. This can attract more users and developers who prioritize decentralization.
This project will improve the overall governance framework, ensuring transparency, security, and user trust. These improvements will drive growth and create new opportunities within the ecosystem.
All code and documentation will be available in a public GitHub repository, ensuring transparency and accessibility.
MLabs has an outstanding track record of delivering on Catalyst Projects. All our accomplishments are publicly available for scrutiny, and our mlabs-haskell GitHub repo provides a wealth of information on past Project Catalyst efforts.
Requirements Specification
Outputs:
Acceptance Criteria:
Evidence of Milestone Completion:
Proxy Validator Development
Output
Acceptance criteria
Evidence of milestone completion
Proxy Validator Testing & Review
Outputs
Acceptance Criteria:
Evidence of Milestone Completion:
Spending Validator Implementation
Outputs:
Acceptance Criteria:
Evidence of Milestone Completion:
Documentation of Protocol and Validators
Outputs:
Acceptance Criteria:
Evidence of Milestone Completion:
End-to-End Testing and Performance Validation
Outputs:
Acceptance Criteria:
Evidence of Milestone Completion:
MLabs
MLabs has quickly become one of the premier development firms in the Cardano Ecosystem. We are an IOG Plutus Partner and work regularly with IOG to develop the Cardano blockchain and ecosystem. Our team is composed of talented developers who have helped build community projects such as:
Through our work with early-stage projects, we have one of the largest groups of Haskell/Plutus developers in the community.
Core team
Tomasz Maciosowski
Tomasz, a Haskell/Plutus developer, has gained experience through involvement in projects such as Clarity and Charli3. Additionally, he has made contributions to different infrastructure projects like CTL.
Connor Fang
Connor Fang is a haskell engineer at MLabs. With over three years of experience in the Cardano stack, he has helped develop and maintain various protocols and open-source projects. Notably, he implemented a significant portion of Liqwid’s agora governance protocol’s on-chain part. He specialises in various on-chain and off-chain toolkits, including but not limited to plutarch, ctl, and nix, and he hopes that his passion can bring power to Cardano’s growth.
Milestone 1 (Spec): 199 hours
75 h - Research spending, minting, and voting conditions
62 h - Draft specifications for each validator
62 h - Create a detailed LaTeX document for the conditions
Milestone 2 (Proxy Implementation): 182 hours
62 h - Develop the proxy spending validator using Plutarch
62 h - Implement the V3 minting policy
58 h - Set up a GitHub repository for the project
Milestone 3 (Spending/Voting Implementation): 182 hours
68 h - Create a comprehensive test suite for the proxy validator
54 h - Conduct code reviews
46 h - Validate the implementation using test cases
14 h - Document results in a test report
Milestone 4 (Off-chain & Frontend Integration): 234 hours
89 h - Develop the spending effect validators in Plutarch
74 h - Write test cases for the spending validators
57 h - Review and validate the code with tests
14 h - Upload the code to GitHub
Milestone 5 (Documentation): 234 hours
90 h - Develop the voting effect validators in Plutarch
58 h - Write and execute test cases for voting validators
58 h - Conduct final code reviews and validation
28 h - Ensure documentation and upload the code to GitHub
Milestone Final (End-to-End Testing): 300 hours
101 h - Develop off-chain components for clarity.vote integration
71 h - Implement frontend interface for proposals and voting
71 h - Create API documentation and tutorial guides
57 h - Test on Testnet and prepare a closeout report with a demo video
Total: 1,331
Subtotal: 1,331 hours @110 USD/hour = 146,410 USD
Total (@ rate $0.293 USD / ADA): 499,692 ADA
**In the interest of full transparency, please note we have applied a conservative USD/ADA exchange rate in pricing this proposal. This is to ensure our operations remain stable regardless of market conditions. Although we firmly believe the future of Cardano is bright, we recognize the price of ADA and all cryptocurrencies is inherently volatile. Our financial obligations are denominated in fiat. Most importantly, this includes the salary of our engineers whose hard work makes projects like this possible.
In the unlikely scenario of severe negative price movement beyond our forecasted rate, it is possible that MLabs may need to temporarily suspend work on this proposal until the market recovers. Rest assured, this decision would be made solely to protect our business's long-term viability and never taken lightly. We appreciate your understanding and support, and we are excited to see what we can achieve together.
The cost of the project represents value for money for the Cardano ecosystem for: