Establish a robust incentivization framework that encourages consistent and informed participation and fair compensation from a diverse range of DReps. However, achieving this objective faces several technical obstacles, including designing fair reward mechanisms, ensuring the sustainability of incentives, and preventing the misuse of incentivization structures. Addressing these challenges is crucial to fostering a balanced and representative governance model for the Cardano community. This proposal covers:

• The definition and selection of meaningful parameters representing DRep activities and contributions.
• Development and iterative refinement of the incentive algorithm based on continuous data collection and feedback.
• Regular community engagement through workshops, GitHub discussions, and live events to validate the model's effectiveness and fairness.
• Detailed reporting on milestones, data outcomes, and algorithm performance to maintain transparency and foster trust.

Currently, there is no structured and data-driven mechanism to reward Delegated Representatives (DReps) effectively. Without clear and fair incentives, DReps may lack motivation or clarity on how their contributions are valued, leading to inconsistent participation and suboptimal governance outcomes. The absence of a rigorous and transparent process to establish such reward mechanisms is likely to undermine the credibility and effectiveness of the governance process.

We will define parameters, monitor DRep behavior across key parameters to collect data and model incentives. Using this data, we'll create a mathematical formula that fairly rewards valuable contributions.This work will be transparently documented, -communicated, openly tested, and iteratively improved. The model will be guided by community feedback and evidence based work from experts.

Transparency:

• The community gains clear visibility into how incentives are structured and awarded. Engagement:
• Increased motivation for active, consistent, and high-quality participation from DReps. Fairness:
• A data-driven approach ensures rewards are proportional to measurable contributions, enhancing trust. Community influence over the process ensures a fair distribution model.

Scalability:

• A model adaptable for future governance needs and changes in community dynamics.The process can be replicated to create similar models for other governance bodies.

The Project completion, we will deliver:

• a comprehensive DRep activity dataset
• a community dashboard visualizing DRep performance
• a tested incentive formula ready for implementation
• a formal implementable CIP document for governance integration

This initiative will significantly enhance Cardano's governance by aligning DRep incentives with ecosystem health, increasing participation rates, and improving proposal assessment quality.

Milestone 1: Initial Setup and Discovery (2 month)

Tasks:

• Initial Discovery research
• Infrastructure setup
• Creative Workshops (initial sessions)
• Basic Website Setup
• Initial parameter brainstorming
• Data Structuring (initial format setup)

Milestone Output:

• Initial discovery research report
• Documentation of initial creative workshop sessions
• Basic public-facing informational website
• Initial Script Development

Evidence of Completion:

• Published initial research report
• Workshop records (attendance lists, key outcomes)
• Operational basic website accessible to community
• Basic website available
• Initial monitoring script development

Milestone 2: Framework and Initial Model Development (2 month)

Tasks:

• Creative Workshops (follow-up sessions)
• Community Engagement
• Framework Development (initial draft)
• CIP Drafting (initial draft)
• Parameter Selection (preliminary set)

Milestone Output:

• Preliminary solution framework document
• First CIP draft submitted for community review
• Preliminary incentive parameters defined
• Initial structured data outputs

Evidence of Completion:

• Framework draft document
• Initial CIP draft available publicly
• Documented initial parameter definitions
• Script code available on GitHub

Milestone 3: Community Engagement and Data Collection Start (2 month)

Tasks:

• Active GitHub Monitoring
• Community Engagement
• Continued Script Development
• State of the art

Milestone Output:

• Active community engagement channels
• Participation in community events
• Improved monitoring script version
• State of the art paper published

Evidence of Completion:

• Community interaction logs (GitHub, events)
• Structured data examples documented
• Improved script code repository

Milestone 4: Model Building and Validation (2 month)

Tasks:

• Model Building (initial version)
• DRep Payment Calculation (initial simulation)
• Formula Design (preliminary structure)
• Data Testing and Validation (initial phase)
• Dashboard Development (initial version)

Milestone Output:

• Initial incentive model and simulations
• Preliminary incentive calculation formulas
• Initial functional version of the incentive dashboard

Evidence of Completion:

• Model documentation and simulation results
• Formula documentation and initial test results
• Dashboard live URL and initial feedback

Milestone 5: Dashboard Development and Refinement (2 month)

Tasks:

• Site Maintenance (updates)
• Community Engagement
• Continued Data Collection
• Further Data Testing and Model Refinement
• Framework Development

Milestone Output:

• Documentation of maintenance and minor updates
• Refined model based on collected data
• Framework architecture model

Evidence of Completion:

• Maintenance and update logs
• Refined model and testing report

Milestone 6: Final Model Validation and Community Oversight (1 month)

Tasks:

• Final Model Validation
• Community Engagement (final feedback sessions)
• Website and Dashboard Finalization
• Meeting Facilitation (key stakeholder meetings)

Milestone Output:

• Fully validated incentive model and dashboard
• Comprehensive community feedback report

Evidence of Completion:

• Final validation report
• Community feedback and meeting records

Milestone 7: Project Completion and Reporting (1 month)

Tasks:

• Final Milestone Reports
• Comprehensive documentation of all processes
• Transcripts and Relations documentation
• Fund Administration (final financial reporting)

Milestone Output:

• Comprehensive final project report
• Complete handover documentation

Evidence of Completion:

• Published final report and comprehensive documentation
• Financial transparency documents

Key Performance Indicators (KPIs)

Engagement & Community Feedback

• Number of DReps engaged via GitHub, Discord, X, Town Halls or other channels: Target ≥ 60 individual DReps over 12 months
• Number of public GitHub discussions opened and actively maintained: ≥ 10
• Community workshops held: ≥ 12 (at least one every month) Workshop attendance rate: Minimum 8 participants each
• Create a model that is approved by at least 51% of active stakes in DReps through a governance info action.

Technical & Research Output

• Open Source monitoring script deployed and running with >95% uptime: by Month 3
• Structured dataset published with full ledger-based metrics: by Month 4
• Incentive model version 1.0 implemented and simulated with real data: by Month 6
• Number of incentive formula iterations with documented feedback applied: ≥ 3
• Addressed Goals of CPS-0020: 1
• Addressed use cases of CPS-0020: 3
• Feedback from contributors, DReps and Community via Form: > 4/5 - ‘good’

Transparency & Governance Integration

• CIP draft submitted to GitHub: by Month 4
• CIP accepted or actively under community review: by Month 10
• Dashboard showing real-time DRep activity and projected rewards live: by Month 7
• Final handover documentation with at least 1 peer review: by Month 12

Communication & Education

• Public posts, threads or summaries on X, Discord, and Catalyst forums: ≥ 4 per milestone
• State-of-the-art paper or summary published and shared with Cardano stakeholders: by Month 6

Sustainability & Handover

• Website and dashboard operational and documented for handover: by Month 12
• Maintenance plan including open-source repo, documentation, and contact points: published at project end

Conceptualization

Tasks:

• Discovery
• Creative Workshops
• Framework Development
• CIP Writing and Drafting
• Cost: $43,000

Active Community Involvement

• Tasks
• Github support
• X support
• Online/Offline Events
• Cost: $37,320 ##Modeling of Incentives Tasks
• Parameter selection and refinement
• Model creation
• Payment simulations
• Formula design
• Data testing/validation
• Cost: $$40,800

Monitoring DRep Activity

Tasks

• Script development
• Ongoing monitoring/data structuring
• Cost: $15,000

Web Design

Tasks

• Basic Website
• Dashboard design/-implementation
• Website updates/maintenance
• Cost: $11,200

Science

Tasks

• State of the Art
• Additional Consulting
• Cost: $42,000

Administration

Tasks

• Project Management
• Milestones report
• Facilitating Meetings
• Managing Relations
• Administering Funds
• Cost:$31,680

Additional Cost

Tasks

• Software/Tools
• Travel Cost
• Cost: $8,900.00

Contingency

• Cost(12%): 27,962$

Revised Total Funding Calculation

• Labor Costs: $221,000
• Additional Costs: $36,862
• Grand Total: 257,488

Duration: 12 months (structured across 7 milestones)

Team Size:

• 3 committed core members (already been working on this)
• 3 commited Cardano After Dark members (minimum involvement, joining when funding is available)
• 1 commited SME (no involvement, joining the project when funding is available)
• 1 SME prospect

Time Commitment: Approx. ~2160 total project hours over the entire duration.

Already involved proposers

Seomon:

• Project Manager
• Cardano Ambassador
• Constitutional Alternate Delegate
• successfully closed out 9 Catalyst funded projects - https://www.lidonation.com/en/project-catalyst/users/634/
• Interim GMC Committee Chair

Lt. Assistant Professor Martin:

• Interim GMC voting seat member,
• Cardano Constitution Delegate,
• Telecommunication and cybersecurity specialization,
• Project Management and Business Development Strategy,
• xSPO official member,
• CSPA official member,
• Nikola Vaptsarov Naval Academy Blockchain and cryptocurrency assistant professor,
• Founder of Andromeda Way,
• Founder of Bulgarian Cardano Community.

Sebastian:

• EMURGO Blockchain Instructor
• Copywriter on over 20 projects
• Co-creator of Cardano Smart developer bot
• Blockchain consultant

Cardano After Dark:

Randall

• Software Architect with a focus on Cardano.

Jake

• CS PhD with focus on data visualization and professional experience incentive modeling

Patrik

• Senior full stack Software Developer

SME:

Elisabeth

• sociologist in work and organizational theory

Website & dashboard continuity

We will provide a dedicated website featuring a publicly accessible dashboard summarizing DRep activity data and calculated rewards. This website and its dashboard will remain operational throughout the research period and beyond, as long as funding permits. During the active phase, our team will manage regular updates, backups, security measures, and ensure consistent accessibility and performance. Following the project's completion, the site will be maintained by our team with minimal updates, including hosting, minor bug fixes, and basic security upkeep. Alternatively, if integrated into Cardano’s governance infrastructure, maintenance responsibilities could transition into a community-led initiative. Annual hosting costs and basic maintenance are estimated at approximately $500, assuming no major redesigns are required.

Data & Script updates

The monitoring script developed to capture DRep activity data from the Cardano ledger will be maintained and updated regularly by our team throughout the project, ensuring reliable real-time and/or historical data collection. This script will run continuously to structure data effectively for integration into the incentive model. Additionally, we will open-source the monitoring script via GitHub, enabling community developers to contribute, maintain, or adapt it for future use. Periodic updates required to ensure ongoing compatibility with ledger changes will be clearly documented, facilitating an effective handover to a designated maintainer after the project's completion.

Model and Script Maintenance:

The incentive algorithm, once finalized and documented within a formal CIP, will be designed for scalability, adaptability, and ease of maintenance. Throughout the project, we will regularly maintain the monitoring script, adapting it to any changes in the Cardano blockchain to ensure accuracy, efficiency, and reliability. Technical support and periodic reviews will safeguard the effectiveness of the script and the incentive algorithm. Post-project, the continued maintenance and refinement of the algorithm and its associated monitoring script will depend on their adoption into Cardano’s governance framework. If officially implemented, governance bodies (such as the Cardano Foundation or Intersect) could assume responsibility for ongoing reviews, necessary adjustments, and support in response to evolving DRep behaviors and community needs.

Community Oversight

To sustain transparency, engagement, and continuous improvement, the project team will facilitate regular community check-ins, feedback sessions, and open forums such as GitHub discussions, Discord channels, and Town Hall meetings throughout the project duration. Community inputs will directly influence the iterative refinement and validation of the incentive model. Upon project completion, a clear handover process,including detailed documentation and a comprehensive final report, will empower the Cardano community to oversee, maintain, and potentially enhance the deliverables. Community feedback channels will remain active for at least six months post-project, allowing ongoing discussion, questions, and suggested improvements, thereby ensuring sustained community involvement and oversight.

Funding

The initial project budget covers all necessary costs associated with development, deployment, and initial maintenance, including website management, script updates, and incentive model refinement. Long-term sustainability beyond the 12-month project timeline will require securing additional funding or integrating maintenance costs into Cardano’s treasury system. To ensure continuity, a modest reserve from the allocated contingency budget can be utilized to bridge any immediate, short-term maintenance needs such as hosting or minor script updates if further funding is not immediately available. Any additional funding requirements identified during ongoing maintenance will be transparently documented and addressed through contingency funds or future funding proposals.

• https://tempo.vote/polls
• https://github.com/cardano-foundation/CIPs/pull/997
• https://cardafterdark.com/wp-content/uploads/2025/04/drep-reg-and-drep-over-time-scaled.png

The successful implementation of this proposal relies on several key dependencies, both internal and external to the Project:

1. Access to Cardano Ledger Data The Project requires consistent and reliable access to real-time and historical data from the Cardano Blockchain ledger to monitor DRep activities and behaviours effectively.

2. Open-Source Libraries and Tools We will leverage open-source libraries for data processing, modeling and visualization. The functionality and updates of these tools must remain compatible with our technical requirements throughout the 12-month period.

3. Community Participation The iterative refinement of the incentive model depends on active engagement from Cardano Community, including feedback from DReps, stakeholders, and governance participants during workshops, GitHub discussions, and live events. Limited participation could hinder validation efforts.

4. Technical Infrastructure The development and maintenance of the monitoring script, website, and dashboard necessitate stable hosting services, GitHub repositories, and analytics tools. Any disruption in these services, like server downtime or cost increases, could affect Project deliverables.

5. Event Organizer Support For travel related dependencies, such as attending Cardano Summit or other relevant events, we assume partial logistical support, like flights and accommodation, from event organizers. If this support is unavailable, we may need to draw funding from the contingency budget of the Project.

6. Governance Framework Stability The Project assumes that the current Cardano governance structure, including DRep roles and responsibilities, remains stable during the 12-month monitoring period. Significant changes to the governance model could require adjustment to our parameters and incentive formula.