Clarity, A Governance Tool for Projects on the Cardano Blockchain

Clarity is a protocol for governance on the Cardano blockchain. Governance of what? Clarity leverages a comprehensive library of smart contracts (Agora) designed for efficient, secure management and governance of capital. 

Its unique governance toolkit facilitates the creation and seamless operation of decentralized organizations, and more importantly decentralized autonomous organizations (DAOs). A DAO enables stakeholders to reach a weighted democratic decision akin to a board of directors in a company.. Decisions on treasury management, protocol modifications, script updates, and emergency measures for user protection, are but a few examples. Participation in this decision-making process is contractually based and limited to those with a vested interest (utility of a DAO token), ensuring alignment with the project's best interests. 

GT = Governance tokens, GAT = Governance action taken

The innovative approach of Clarity lies in its utilization of both on-chain and off-chain voting mechanisms, allowing for a more inclusive and dynamic governance process. This method ensures that governance tokens are pooled to represent the collective decision-making power of the community but that diverse discourse is fostered. 

This Web 3.0 protocol uses the following equation to calculate the voting power at a given snapshot:

Intuitively the more governance tokens you stake to the DAO the more voting power you are granted. Note that there is a scale parameter that allows the DAO to award a linear/quadratic scale, this affects the way voting power is calculated. Quadratic voting takes a square root of a members voting power, this is a measure that can be used to decrease the influence whales have on community wide vote, a useful tool for encouraging diversity. 

Some of the tools you can use for your Organization or DAO on Clarity include Polls, Bounties, and Proposals.

Polls are available to Organizations and DAO’s and they serve as tools for temperature checks.

Bounties are also available to Organizations and DAO’s and they enable the create of a governance action that crowdsource ideas from the DAO community. 

Proposals are only available to DAO’s as they rely on on-chain contracts to execute.    

Clarity's design not only encourages active community participation but also ensures that every decision is informed and reflective of the community's consensus, paving the way for the transparent and democratic operation of decentralized projects on the Cardano blockchain.

In the future the Cardano blockchain will enable the delegation of ADA to representatives who will participate in active governance. CIP 1694 will be ratified in Buenos Aires later this year and will enable ADA stakers to delegate to representatives who will be empowered and entrusted to vote on behalf of the communities they serve. Clarity protocol complements this upcoming change by providing a tool set Cardano Communities can utilize. Clarity is here to help nurture these communities with ever evolving tools, please take part in the testnet to learn more about what is next for Clarity.