Project Catalyst — An Introduction and the Road Ahead
When I heard about Project Catalyst for the first time at Cardano Virtual Summit in summer 2020, I knew that it would be something big. I was happy for the opportunity to join the Fund1 focus group, where participants helped to test the system including proposal submission and voting with a test ADA.
Since August 2020 I took part in each weekly townhall, first in Fund1 and then in Fund2. I wrote about Project Catalyst and did several interviews with active participants including Maria Carmo, A, Steve Aldrich, and James Dunseith.
Project Catalyst: What is it about?
In case, some of my readers still don’t know, Project Catalyst is a governance and proposal system in the Cardano ecosystem, which helps to manage treasury and allocate resources for the projects, which are supported by ADA holders. As Charles Hoskinson said in one of his recent videos, there are $80 million worth of ADA ready to be distributed via Project Catalyst each year. And this number will grow as the price of ADA grows.
You might still have some questions and I would like to try answering them.
Why should there be a treasury model?
The cryptocurrency industry is a highly competitive field. The development process requires funding, and there are different ways of it: pre-mined coins, investments (including ICO-type of investments), donation, etc. Among all of these, the treasury model when the stakeholders can decide how to allocate resources, looks the best among them.
What it gives to the ecosystem and community?
Successful projects and DAPPS built on Cardano can bring added value to the ecosystem, create new jobs and business opportunities, bigger demand for ADA, and corresponding rise in price.
What does it give you?
Project Catalyst gives you a chance for a dream job. Yes, you can shape your future dream job yourself, be it a business, podcast or community development project. The chance is not a guarantee, so don’t be disappointed if your proposal is not funded the first time. As you grow your skills and knowledge in the Cardano ecosystem your chances increase and might become a reality someday.
World’s Largest Decentralized Innovation Fund
Fund2 is almost over, and everyone who wants to help Cardano grow can think about taking part in Fund3. Fund2 has a funding resource of $250,000 worth of ADA, and Fund3 will be twice as big — $500,000. The best way to start is to join Ideascale, then read the existing proposals, commentaries, and FAQ.
As project manager Dor Garbash likes to say — “We are the biggest DAO”. DAO is a Decentralized Autonomous Organization. You may remember the first crypto DAO was created on Ethereum in 2016. The same year hackers attacked the DAO, gaining access to 3.6 million ETH. This event created a fork of Ethereum, part of the community supported Ethereum Classic. Currently, Charles Hoskinson has tried to save the Ethereum Classic’s fate by proposing a treasury system and a way for self-sufficiency. These threats are one more reason why in the Cardano ecosystem there exists a scientific approach that includes a lot of development and testing, and it’s not always the fastest way. That’s why there was some delay in the development process of Project Catalyst.
In addition to the impressive number of financial resources, Project Catalyst has hundreds of active participants: proposers, reviewers, community advisors. We can only imagine how this number will grow when the first projects receive funding and the next funds move on. It was amazing to watch the project grow every week. Fund1 was more communicative, and the Fund2 town halls are open, everyone can watch them live, and then they are uploaded to IOHK youtube.
Recently the project moved to the voting registration phase and every ADA holder who had 8000 ADA or more was able to register via a special version of Daedalus Catalyst. Even though the registration process takes time and effort, more than 1725 wallets were registered in a few days. The voting started on 15 December and will end on 4 January 2021. Taking into account that there are many proposals, it’s a reasonable time frame since it will take a lot of time to read through all of them!
There is no economic incentive to separate your ADA eligible for voting, so we can assume that the number of 1725 wallets is close to the number of 1725 people. (Also since the voting happens in mobile app, registration and voting with 2 or more wallets is not comfortable and requires more time). In comparison, DASH has ± 1,000 unique voters and all top 100 DAO on Ethereum combined have ±1,100 voters. What’s more impressive is the amount of ADA and its voting power. Fund2 voters have 566 million ADA which at the moment of writing is close to 100 million dollars. This is really high participation, which will increase as the technology and awareness of Project Catalyst increases.
Project Catalyst after the voting
In the middle of January 2021 funds should be received for the Fund2 proposals. For me, the most interesting parts are to see which proposals will be funded and how the participants will vote. Will they follow the assessment made by community advisors? Will big ADA holders/whales influence? After funding, it will be very exciting to see the projects grow. Some of the projects can create additional jobs in the Cardano ecosystem and bring more opportunities and growth for everyone.
I wrote separate articles about my proposals which include a Cardano Hub and Cardano Media Projects which took part in Fund1 and will now take part in Fund2. Being a realist I think they have only a small chance of being supported. Most important is the Cardano community in the broad sense, as I met many interesting people among the Catalyst participants and beyond. I’m thankful for all the feedback and I used it to shape and refine my proposals. I think that we have many opportunities with Project Catalyst, we might become community advisors for the next Funds, and/or we might come with some DAPP development idea for the future.
I’m going to record more videos with Project Catalyst participants.
If you are one of the registered voters — don’t forget to vote!
And if you are new to Project Catalyst or curious to know more — just dive into the latest pre-Christman townhall, check the proposals, create a profile on Ideascale, visit additional links, and don’t hesitate to ask the questions.