The Rings of Power: Cardano's Genesis Keys

Opens October 11th 2023 to address the rings of power, the seven genesis keys, noting everything is written down in the public Cardano Ledger formal specifications.

The formal specs cover every era from Byron to Conway, and that genesis keys were introduced with Shelley to change system parameters and trigger a hard fork via the new hard-fork combinator.

The seven keys were distributed 3-2-2 to IO, Emurgo, and the Cardano Foundation, needing five of seven to upgrade after a social process, the Shelley federated governance model.

Two social processes: one for a protocol parameter or MIR and treasury update, and one for a hard fork requiring 70 percent of SPOs to agree before proposal mode.

Shows 11 people from IOG, the CF, and Emurgo signing a well-formed update proposal submitted to the network, with weeks of latency.

The big frustration is that the genesis-key social processes are unclear, like the threshold for a protocol parameter update, which is exactly why CIP 1694 is a big step forward.

The keys are more a custodial trustee role than a governance process, so years ago they gathered people through workshops to design the more robust CIP 1694.

CIP 1694 replaces the genesis keys with a Constitutional Committee and seven governance actions, three regulating the committee and the rest replicating the Shelley update process plus new Conway actions.

The info action polls the community to approve budget referenda, CIPs, and roadmap items, while the committee has no vote on the no-confidence and new-committee motions decided by DReps and SPOs.

It turns the static hardcoded 3-2-2 quorum into a term-based elected committee of three to nine members constrained by Plutus smart contracts, unlike the Shelley bootstrap that had no SPOs or Plutus.

The constitutional committee goes beyond off-chain social consensus to algorithmic adjudication with elected rotating members, needing an interim committee for three to six months before term-based elections.

The tripartite model: a hard fork needs the 70 percent SPO quorum plus DReps and the committee, a constitution update needs DReps and the committee, and no-confidence is decided by DReps and SPOs.

The committee is a guardrail role preventing the other parties from, say, distributing 100 percent of the treasury to one actor even with a DRep and SPO majority.

On-chain data shows five IO signatures rather than three because Emurgo delegated its keys to IO as a custodian for operational and security reasons, revocable at any time.

Shows the Ken Kodama and Manabu Mezaki signatures, and confirms IO controls three keys plus two delegated from Emurgo and two from the CF, a 3-2-2 model operating since 2019.

Claims that certain entities totally control the network are materially untrue, since the 3-2-2 balance is hardcoded and disagreement would just cause an uncontrolled hard fork like Bitcoin Cash or Ethereum Classic.

Every role is delegated stake to an SPO, delegated voting to a DRep or yourself, or an elected fixed term, making it fully democratic like a constitutional republic.

Cardano's democratic structure bootstraps more sophisticated governance like non-stake-weighted and quadratic voting, but first must replicate hard forks, protocol parameters, treasury withdrawals beyond Catalyst, and a catch-all vote.

Points to SanchoNet and the work-in-progress Sancho ledger formal specifications, stressing everything is written down and social systems mix algorithm with social process.

The point of CIP 1694 is to memorialize traditions like the 70 percent SPO threshold into algorithmic adjudication, moving on-chain what Shelley lacked extended UTXO and Plutus to do.

SanchoNet is at version 8.5 and months from feature-complete, and a hard fork will require both the 70 percent SPO consensus and a Cardano Ballot community vote given its significance.

Solana suffers uncontrolled restarts yearly from its consensus, while Cardano's foresight in the formal specs and gradual federated-to-decentralized rollout avoided that, citing the Updatable Blockchains paper by Dionysis Zindros and Aggelos.

Says if CIP 1694 does not pass he is out of ideas and IO will burn its genesis keys, leaving Emurgo and the CF to decide, since any deviation regresses to a more centralized or radically divergent state.

Failing to pass would be a vote of no confidence meaning a different leadership team should design it, rejecting the claim IO wants to enshrine a dominance it does not have.

Reflects the roadmap slipped from 2020 due to the Byron reboot, formal methods lengthening development, and moving tech like Yella to the service layer, and notes Mithril 2 was just submitted to Eurocrypt.

The community must choose between continuing the hard-fork-combinator path that CIP 1694 governs, moving to a Polkadot OpenGov or Tezos model, or Bitcoin-style uncontrolled-fork chaos.

A founder must know when to say I versus we, and that Cardano is now a community of millions whose will the dual vote and SPO poll express.

Wants to spend 2025 to 2027 building applications and side chains for economic identity, banking the unbanked, and decentralizing data, computation, and network.

Highlights Midnight under Eran for data confidentiality, done with principles preserving freedom of Association, Commerce, and Expression, since even YouTube deprioritizes keto videos outside the orthodoxy.

Core research must be a hundred-company effort like Linux, which is why Intersect was formed to own the repos, specs, and product backlog, with the info action and open treasury enabling budgets.

The open treasury lets the government of Cardano set an annual budget deciding who is paid for marketing, adoption, and development with KPIs and reporting.

His Venture Studio will build real applications like John O'Connor's RealFi in Kenya for a stablecoin M-Pesa experience, Midnight, and Atala Prism self-sovereign identity.

CIP 1694 gives the resources to recursively improve governance, hold treasury-funded institutions accountable, and let you fire DReps in real time or the committee by term.

Defends against claims of a permanent dictatorship, saying like a hermit crab Cardano has outgrown the Shelley governance shell and must choose a new one.

Cardano leads the industry, with Vitalik now admitting bonded staking and eventually extended UTXO are good ideas they proposed six years ago, backed by nearly 200 peer-reviewed papers with no moonboy marketing.

It is the community's decision, likely a compromise between formality and agility and whether core features like transaction determinism are preserved for developer expediency.

Reflects on being in the room where humanity's direction is decided, unlike Bretton Woods in 1944, and criticizes the rigged US two-party coronation that offers no real choice.

The blockchain movement aspires to self-sovereign identity, being your own bank, and economic identity, with on-chain governance the ultimate emergent reflection, now in the community's hands.

Closes urging people to become a DRep at sancho.network, and notes they need builders for dashboards and DRep tooling that keeps evolving every two to four weeks.