Catalyst Fund10 is Over

Published 26.9.2023

On Thursday, September 21, the results of the voting in Catalyst Fund10 were announced. 192 projects from more than 1300 ideas received funding. 50M ADA coins will be distributed among these projects. 409K votes were cast, which is an increase of 12.5% compared to Fund9. 57,118 unique wallets registered for voting. 4.48B ADA coins were used for voting, which is roughly a fifth of all coins that are staked. However, the results have opened debates about the fairness of the vote.

Many Downvotes

The Cardano community started debating the large number of downvotes that affected the voting results.

If you look at the results, you will find that there were a large number of downvotes for all projects, including those that were placed on the front ranks. A large number of downvotes is surprising mainly for projects that seem to be clearly beneficial for the Cardano ecosystem or whose teams have a good track record. Of course, it's not about our opinion, but about the opinion of those who vote.

Many people were surprised by how many downvotes (NO) are used and think that Catalyst should only allow upvotes (YES).

Wallets vs. Voting Power

You can see the overview of wallets vs. voting power in the image below, made by Juan Pippo.

As you can see, the largest representation of 34.38% had wallets with from 1K to 5K ADA coins. There were 19,639 of these wallets. The total amount of ADA coins in this group was 47.3M.

The second most numerous group belongs to wallets with between 450 and 1000 ADA coins. There were 9,938 wallets in this group, which was 15.6%. The total amount of ADA coins in this group was 6.1M.

The third most numerous group were wallets with 10k to 25k ADA coins. There were 8,407 of these wallets, which was 14.7%. The total amount of ADA coins in this group was 129.7M.

The smallest representation was a single wallet with between 75M and 100M ADA coins. The owner of this wallet holds 82.8M ADA coins.

The owner of one wallet had more voting power than the 2 most numerous wallet groups, that was more than almost 30K wallets.

You can find a good overview from an author who calls himself Ed n' Stuff.

As you can see, 34 big whales, i.e. wallets with more than 10 M ADA coins, participated in the vote. They all together had roughly 630M ADA coins available for voting.

1 ADA = 1 Vote

Many people believe that 1 ADA = 1 vote is not a good mechanism. They propose different solutions, for example, quadratic voting, or a system similar to 1 person = 1 vote.

Proposals like quadratic voting cannot work, as whales can always split their ADA coins into multiple wallets. It's laborious but doable. All restrictions and limitations at this level do not make sense. It could only work if it was possible to associate ADA coins with a real identity. However, this is undesirable in the blockchain world.

I perceive the proposal similarly that those who, for example, stake ADA for a longer period of time, would have stronger voting power. Or one that would do more on-chain transactions. None of this will work, because even a whale can stake for several years without a change in staking. A whale can even run its own pool. A whale, like anyone else, can send a huge number of transactions. It's just a matter of fees.

I saw a suggestion that older wallets with less ADA should have more voting power. This is not a good idea either, as it would discriminate against newcomers. Why should newcomers to the ecosystem have less voting power than older ones? If a whale splits ADA coins into thousands of wallets today, they will be old wallets in a year or two. This way the whale will maintain its position.

The system that I have seen in the governance model of other networks allows one to get more voting power by locking coins for some period of time. The longer the coins are locked, the more the voting power will increase. Even here, however, I am skeptical, because a whale only needs to have 10% of his wealth liquid and he can lock up the rest for the same period as anyone else. Anyone who is willing to hold coins through the entire bear market will lock coins for 2 years.

Cardano has liquid staking and people want to use ADA in DeFi or just spend it. I think most people would not use coin locking to get more voting power.

So should we think about a 1 person = 1 vote system? Cardano is a global network. People can vote from every continent in the world including developing countries. Who would do KYC? Would people even be willing to provide KYC information for the sake of Catalyst or on-chain governance? Rather not, and it certainly shouldn't be a condition.

Perhaps it could work with some form of decentralized identity (DID) that would be used anonymously when voting. However, this could only be introduced at a time when most Cardano users would have a DID.

The only meaningful debate that seems relevant to me is whether or not to cancel downvoting. Maybe just upvoting would be enough. However, downvotes can help to filter out the proposals that are not aligned with the vision and goals of Cardano, or that are not feasible, ethical, or beneficial for the ecosystem. Opinions on this topic vary.

Addresses with many ADA coins may appear in the system through some DeFi protocols or liquidity pools. If people lock ADA coins on DEX to the liquidity pool, they cannot vote directly through ADA coins because they do not hold them in their wallets. Some DeFi projects have allowed people to vote through a different kind of token on the use of ADA coins in Catalyst. This should be the standard, including getting a reward for voting.

Alternatively, people could send ADA coins from the DeFi protocol to their wallet before taking the snapshot for Catalyst. Take this as a tip for Fund11.


In PoS consensus, whoever has more ADA can mint more blocks. It works because the incentives are set so that everyone acts in the interests of the protocol. Deliberately not minting blocks means financial loss. Whales behave just like small fish. Everyone wants to get a reward. Incentives are aligned.

However, this won't work in Catalyst, as teams compete with each other for votes. It is even possible to vote against the competitors. In the case of governance, ADA coins are used differently than in network consensus. The incentives of individual actors differ because the goals are different.

Although some (from my point of view, good) projects did not get funding, Catalyst is the best we have. Many people from the community commented on the results and came up with new ideas and suggestions. This is very positive. Catalyst is an experiment and subject to change.

We congratulate all projects that received funding in Catalyst Fund10.


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