Self Governing Stake Pools

A stake pool's management is centralized which hinders delegator engagement, requires trust and lacks accountability towards the community

Pools becoming decentralized autonomous org. where the power is in the hands of the delegators and decisions are made by vote consensus

This challenge is looking for projects that can design generic stake pool governance frameworks to help other pools transition to a decentralized management (if they wish to). The projects must addressed one or more of the following components:

• Pool Governance Tokenomics
• Pool Governance Forum
• Pool Voting Platform
• Pool Treasury

Successful proposal will also need to address incentive structures and potential risks associated with self governance.

What if stake pools were managed like a DAO (Decentralized autonomous organization)? Every decision made in a stake pool would not be centralized but voted on by the delegators. Stake pools could leverage Cardano's governance system to promote novel and creative ways to manage pools. This would provide decentralization all the way down and empower delegators to influence the direction of their pools in a diverse and equitable way.

Pool Governance Tokenomics

• Governance tokens allow token holders to govern a stake pool's operation in a decentralized way
• Governance token give voting power to delegators to decide on proposals (see Governance Forum)
• Chosen tokenomics strategies would set the incentive structure (fix-supply, inflationary scheme, reward structure, etc.)
• Governance tokens are allocated based on staked amount but also on other parameters like longevity of stake (incentivizing loyalty)

Pool Governance Forum

• Governance forum provide a space where ideas and proposals can be pitched and discussed by the pool community (similar to Catalyst by at the pool level)
• The forum allows delegators to discuss ideas on how to better govern and operate the pool (ie protocol parameters, validator node security and maintenance, charity donation or community projects)
• To avoid proposal spamming, a minimum staking amount would be required to submit a proposal

Pool Voting Platform

• Voting platform provides a secure and decentralized way for a staking pool to make decisions and implement changes based on community consensus
• multi-signature smart contracts make the operation of the pool trustless and secured by the blockchain (as opposed to trusting a single Pool operator)
• Protocol changes will have a time-lock delay to allow delegators to either prepare for the changes or leave the pool

Pool Treasury

• A portion of the pool rewards would be deposited in a Pool treasury (community owned)
• Spending from the treasury would be approved through consensus on the Voting Platform
• For Example rewards distributed to operator, marketing, charity, community projects, etc.

By embracing the decentralization ethos fully, help us make the Cardano community the most empowered, engaged, vibrant and diverse community in the world!