Governance Incentives Framework 2026

On-chain governance action (Treasury Withdrawals).

Cardano is approaching consequential decisions about governance incentives without a shared evidence base for determining which mechanisms work, what they cost, or who should remain accountable for their outcomes. The project separates evidence-based validation from governance legitimacy: candidate incentive mechanisms will first be evaluated through research, data, modeling, and evidence, and then presented to governance for a decision on adoption.

Significant work already exists across Cardano on governance compensation, participation, rationale incentives, reward distribution, voting-power concentration, and governance reward design. The Governance Incentives Working Group has already created a mapping document identifying 49 relevant efforts, proposals, research papers, tools, and related initiatives across this space [1]. This includes work developed through CPS-0020 [2], as well as CPS-0033 [3], CIP-0149 [4], Beyond MVG [6], formal reward-scheme research [7], process-first DRep compensation research [8], and Input Output Research’s Cardano Vision 2026 work [9]. The project will consider these existing ideas and approaches, examine their assumptions, advantages, disadvantages, and potential unintended effects, and combine them with further research, governance data, modeling, controlled testing, and community input to build research-backed community consensus around the most suitable governance incentive models for Cardano.

The result will be a practical Governance Incentives Framework, public dataset and dashboard, documented model and formula outputs, research publications, findings from a controlled incentive pilot, and a governance integration pathway. This directly supports Cardano 2030 Pillar 3 and, through its research and data infrastructure, Pillar 1.

• Proposer return address: stake1uyl49lk2c6vfcvjq9zy0r640rf73k0qw5f64e5t7weagf3s90c7as
• Deposit: 100,000 ₳
• Submitted: epoch 649
• Expires: epoch 656

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Feedback on the "Governance Incentives Framework 2026" Proposal

Thank you to the proposal team for introducing the Governance Incentives Framework 2026. I fully agree that the increasing concentration of voting power is an important governance topic that warrants thoughtful attention. However, after carefully reviewing the proposal details and the publicly available completion reports of the team's past projects, I remain hesitant to support this treasury withdrawal of ₳4,207,967 at this stage.

Public Completion Records and Verifiable Limitations of Past Projects

To ground this discussion in objective reference points, I reviewed the public pages and completion reports for the team's relevant completed Catalyst projects:

1. Smart Pack: parcels damage verification system on Cardano

• Project ID: 1100259｜Catalyst Project Page
• Project Managers: Eric den Boer & Sebastian Pereira
• Timeline: 04/24/2024 – 02/15/2025
• Status: Marked as Complete; fully funded.
• Key Completion Details: Deliverables included freight calculation sheets, an AI photo database, ChatGPT damage evaluation demo videos, backend screenshots, test transaction hashes, UI mockups, workflow recordings, LiDAR tests, early app store links, and web demos.
• Reported Limitations: The “Next Steps” section explicitly notes: “We are in contact with a few agricultural producers in the US... These discussions are in a very early phase, so for now we do not have concrete plans to deploy this solution in a more realistic environment.” The team also thoughtfully pointed out: “Cardano is not very friendly to mobile devices... very slow... In a mass commercial production environment, this will be a severe problem.”

1. Littlefish - Coordinating Action

• Closeout Video: Watch on YouTube
• Status: Marked as Complete.
• Verifiable Limitations: The closeout video has recorded approximately 87 views. The disclosed community size at the time was on the order of around 100 members, and subsequent public sources do not indicate significant transition into a widely adopted coordination platform.

1. Cardano Smart (AI Documentation & Developer Assistant)

• Milestone Page: Catalyst Milestones
• Verifiable Limitations: Although successfully closed out with open-source deliverables, publicly visible GitHub activity remains quiet, with limited records of ongoing user traction or broad integration into mainstream developer workflows.

These projects were all officially marked as completed within the Catalyst system, demonstrating that milestone deliverables were fully satisfied. However, information in the public completion reports suggests that evidence of subsequent real-world adoption and sustained long-term usage remains relatively modest. This leads me to remain prudent regarding whether allocating over 4.2 million ADA toward another extensive research and framework initiative will seamlessly translate into real-world governance adoption and long-term, measurable value.

Perspective on Problem Diagnosis

The proposal highlights that “one Constitutional Committee consortium retired due to lack of compensation” and that “there is no systematic, data-driven approach to determine how to incentivize governance participants.”

I fully acknowledge that appropriate incentives play a crucial role in sustaining active participation. However, I am not entirely convinced that this necessitates an immediate “investment of ₳4.2M into a comprehensive research framework.” A more direct and pragmatic approach might involve substantive refinements to the Constitution or Guardrails, or the rollout of clear, actionable incentive mechanisms.

Preferred Direction for Governance Incentives

I strongly favor establishing an incentive mechanism for DReps, but I gently advocate that incentives should ideally stem from sustainable non-Treasury models. For instance, delegators could consider allocating a small, fixed, or dynamic percentage of their own staking rewards to compensate their chosen DReps.

This operates similarly to a "delegation service fee": delegators receiving rewards from the ecosystem reasonably support the operational costs of their elected representatives. Linking rewards to engagement, dialogue quality, and voting participation creates a healthy feedback loop—allowing dedicated DReps to receive fair compensation while allowing natural delegation choices to optimize resource allocation. This approach minimizes reliance on the Treasury while fostering an active and accountable governance culture.

Conclusion

Given the finite nature of Treasury resources, the modest long-term adoption observed in past similar projects, and the ability of existing tools to cover foundational needs, I believe allocating ₳4.2 million ADA to this research framework may not represent the highest priority at this time.

I look forward to seeing concrete proposals that directly address structural challenges (such as voting power concentration and silent non-voting dynamics) through sustainable incentive models that do not depend primarily on treasury funding.

Based on publicly verifiable records and the available information, I am unable to support this proposal at present. However, if the project team can provide additional context regarding the ongoing adoption of previous initiatives, or demonstrate why alternative lower-cost pathways are insufficient, I would be very open to re-evaluating my perspective.

The topic matters and the methodology looks solid, but over 4 million ada for research whose main output is a framework document is hard to justify, particularly when the proposal itself notes overlap with Input Output Research's ongoing Cardano Vision 2026 work.

The core options for DRep compensation are also already well understood and openly debated in the community, see for example: https://dreptalk.com/t/options-for-drep-compensation-and-who-should-actually-pay-fo-in60zg/

I'd rather see that already-funded research conclude first.

Vote: NO

Research can and should inform that process. It should not become the process.

I agree that governance incentives deserve attention. I strongly disagree that another ₳4.2M research-and-framework exercise is the right way to move them forward.

The proposal itself acknowledges 49 existing pieces of work already addressing governance compensation, participation, concentration, reward design and related issues. Yet the overwhelming majority of this request goes toward conceptualization, research, modeling, workshops, data infrastructure, dashboards, administration and contingency—with only about ₳333K of ₳4.21M allocated to actually testing an incentive mechanism. At the end, we receive a framework, papers, models, a CIP and a pathway for yet another governance decision about implementation.

At some point, more evidence about how we might incentivize governance has diminishing value. A framework has no authority simply because we paid millions of ADA to produce it, and future governance is under no obligation to implement its conclusions.

Looking outside of our own ecosystem:
Other ecosystems have learned by deploying bounded incentive programs, measuring actual behavior, and iterating. Arbitrum has repeatedly adjusted delegate compensation, eligibility and scoring based on observed participation and gaming behavior; Optimism has similarly experimented with delegate rewards, compensated governance bodies and delegation mechanisms. They have produced evidence by doing, measuring and correcting—not by waiting for a comprehensive theoretical framework before acting.

Cardano is well past the point where the primary constraint is a shortage of governance research. If existing research supports a promising mechanism, propose a small, controlled implementation with clear objectives, limited duration, measurable outcomes and an explicit stop/iterate decision. Try it. Measure it. Learn from actual behavior. Then spend more if the evidence warrants it.

I cannot justify spending more than ₳4M primarily creating another evidence-based framework that governance may or may not ever use when we could be putting a fraction of that capital toward real-world experiments today. We do not need another expensive description of the problem nearly as much as we need disciplined attempts at solving it.

I understand the importance of research into sustainable governance participation and appreciates the proposal’s evidence based approach. I have reservations on the over 4 million $ADA budget, potential overlap with existing funded research and whether the proposed KPIs sufficiently measures real governance participation. I don’t have enough confidence to support or reject the proposal at this stage, so I am abstaining.

Thanks to the proposers for offering this. Today we have almost two years of live on-chain governance. We have real data now. The proposal itself identifies 49 existing efforts and research initiatives. It asks for ₳4.21 million and another twelve months of research, workshops, reports, dashboards, simulations, and framework building. Only one controlled pilot is planned, and even that starts halfway through the project.

This feels overly bureaucratic. We already had workshops. We already had reports. We had a Constitutional Convention. We already studied many of these questions. It is time to make a move. Maybe smaller experiments. Maybe test real incentive models. Measure what happens. Learn quickly. Adjust. Repeat.

We should not spend another year studying how governance incentives might work. We should start testing how they actually work. I also question whether ₳4.21 million is a wise use of Treasury funds here. There are many deliverables, but I do not see enough confidence that they will produce a materially better incentive system.

We might all agree in dozens of workshops that a system looks good. It might still fail in the real world. That is exactly why I would rather fund smaller, faster experiments first. At this price, producing another consensus is not enough.

I have been raising this issue since governance went live, so I understand and accept the underlying problem. What I reject is the cheque being presented as the solution.

There is credible evidence of an incentive deficit. Active DRep participation is declining, voting power remains heavily concentrated, and unpaid governance predictably favors wealthy, institutionally supported, or commercially interested participants. A remarkable discovery, if one has somehow avoided observing how incentives work in real life.

Cardano needs compensated governance. That part is not controversial.
What is difficult to justify is ₳4.2 million for a package consisting of research, modelling, engagement, data infrastructure, dashboards, administration, another paper, one controlled pilot, and a future CIP. Apparently, after all these years, the ecosystem still requires a multimillion-ADA expedition to determine that people participate more consistently when participation is not entirely unpaid.

The proposal itself acknowledges 49 related initiatives, alongside separately funded IOR work. Yet coordination is offered after approval, rather than a clear division of labour being agreed before the Treasury is asked to fund the programme. That is a very convenient sequence. It protects the scope of the proposal, while leaving the Treasury to discover later whether the work overlaps with anything already funded.

The commercial case is equally difficult to assess. Workstream totals tell us almost nothing about staffing levels and roles, day rates and contractor costs, pilot rewards, infrastructure expenditure, ownership of resulting assets and intellectual property, decision-making authority, measurable delivery milestones, and conditions for stopping or reducing expenditure. This ain't trivial and it's already sloppy not to address these items.

Lastly, there is the 12% contingency, worth ₳437k, added before the basic cost structure is visible. Contingency is sensible when the underlying budget is transparent and the risks are defined. Here, it risks functioning as a fee for uncertainty, paid in advance by the Treasury. How convenient.

Cardano needs compensated governance; it does not need ₳4.2 million to rediscover payroll and construct dashboards explaining why unpaid work is unpopular.

Translated:
I have thought about this for a long time.

First, in Cardano’s current situation, research spending should face a very high bar. Treasury capital should primarily be allocated where we can expect direct and measurable benefits for adoption and the Cardano economy.

Second, my role as a DRep is a democratic one: to decide whether and how collective capital should be used in Cardano’s best interest. I do not believe Treasury funds should be used simply to financially incentivize more people to vote more often.

If money becomes the incentive for governance participation, the system will increasingly attract people for whom the payment itself is part of the motivation. In my view, monetizing democratic participation in this way does not strengthen democracy; it weakens it.

We can revisit DRep compensation in the future, when Cardano’s financial situation and the actual need for such a mechanism justify it more clearly.

Original:
Ich habe lange darüber nachgedacht. 1st haben Research-Ausgaben für mich in Cardanos aktueller Situation eine sehr hohe Hürde: Kapital sollte derzeit primär dort eingesetzt werden, wo ein direkter und messbarer Nutzen für Adoption und die Cardano zu erwarten ist. Zweitens ist meine Rolle als DRep eine demokratische: darüber zu entscheiden, ob und wie gemeinschaftliches Kapital im Interesse Cardanos eingesetzt wird. Ich halte es für falsch, Treasury-Geld dafür einzusetzen, mehr Menschen finanziell zum Abstimmen zu bewegen. Wenn Geld zum Incentive für Governance wird, zieht Governance Menschen an, für die das Geld selbst Teil der Motivation ist. Meiner Ansicht nach stärkt das Demokratie nicht, sondern schwächt sie. Über DRep Kompensation können wir zu einem späteren Zeitpunkt erneut entscheiden, wenn Cardanos finanzielle Situation und der tatsächliche Bedarf einen solchen Mechanismus klarer rechtfertigen.

Voting YES on Governance Incentives Framework 2026 (₳4.21M). As elected Cardano Civics Committee member, Unified Cardano Student Club President in Nigeria, and advocate for inclusive governance, I support rigorous research into sustainable incentives for DReps and other actors. Current participation costs time and money, which risks concentrating power and excluding voices from emerging markets and student communities like those I work with in Africa. A well-designed framework that increases the number of independent, active DReps (not just better-paying existing large ones) would strengthen decentralisation and long-term participation. I expect transparent methodology, clear success metrics focused on diversity of active participants, and full public reporting. This is an investment in healthier governance rather than a blank cheque.