Sancho Network and Cardano's Governance

Preparation for on-chain governance takes place not only at the level of defining rules and processes through CIP-1694 but also on the technical side. In this article, we will introduce the Sancho Network. You will learn what is already possible to do on this network today.

Sancho Network

Sancho Network is the gateway for on-chain governance.

Currently, it is still under development so it runs as a test-net on which test-net ADA coins are used. Real ADA coins from the main-net are not used.

SanchoNet is built based on the CIP-1694 document to enable the execution of governance actions. Anyone from the community can join and participate in the development of SanchoNet.

You can become an ADA holder (test-ADA holder), Staking Pool Operator (SPO), or Delegated Representative (DRep).

ADA holders can submit governance actions. They can delegate their stake to the chosen DRep similar to how they decide which pool to delegate ADA coins to.

The DRep role was first introduced in CIP-1694. DReps serve as representatives of the community. They are spokespersons in the governance process. DReps actively participate in voting on governance actions and advocate for community interests. Similar to pools, DReps can have different voting power depending on how big a stake is delegated to them.

SPOs are primarily responsible for producing blocks on the test-net. Like ADA holders, they can vote on governance actions.

In the CIP-1694 document, a formal Cardano Constitution and a constitutional committee are described in addition to DReps. However, the role of committee member has not yet been used in SanchoNet (as far as I know).

If you are interested, you can participate in the development of SanchoNet as a developer. This role is not described in CIP-1694. This is help with the development of governance technology, which can be a good experience.

SanchNet is a technological component for the development and testing of technologies that will subsequently be used in on-chain governance. This component will then be used on the main-net as soon as all the necessary off-chain components are delivered.

CIP-1694 describes seven types of governance actions:

• A motion to create a state of no-confidence in the current constitutional committee.
• Modifications to the members of the constitutional committee, signature threshold, or term limits.
• Modifications to the off-chain constitution. Modifications are to be recorded as the on-chain hash of the text document.
• A non-backward compatible upgrade of the network (which requires a prior software upgrade).
• Any change to one or more updatable protocol parameters, excluding changes to major protocol versions ('hard forks').
• Withdrawals of ADA coins from the Cardano treasury (sub-categorized into small, medium, or large).
• An action that doesn't have any on-chain impact except for being recorded on-chain.

SanchoNet's mission is to encapsulate governance actions that governance participants will need to undertake within typical usage situations. I found an excellent description on SanchNet's official website which is self-explanatory and I like it:

Sancho's capability to harmonize pragmatic realities with lofty ideals mirrors the essence of SanchoNet. Much like Sancho, the mission of SanchoNet is to cultivate a system that remains grounded in reality while guided by visionary principles. The ultimate goal? To establish a platform where every voice holds significance, embracing inclusivity and pragmatic wisdom in governance.

SanchoNet has a roadmap on which 6 milestones are marked. 4 milestones have already been implemented. The current status is described in the image below.

You can already register as a DReps on SanchoNet. ADA holders can delegate coins to chosen DReps and they can vote. It is possible to update the committee and withdraw ADA from the treasury, etc. The team is currently working on the possibility of changing the parameters of the protocol.

The idea that these governance actions will one day be in the hands of the community is tempting and essentially necessary from the point of view of decentralization.

For now, SanchNet is Only For IT Gurus

If you choose to collaborate on SanchoNet, please join the IOG Discord. In #start-here, select 'Join the SanchoNet Community'.

If you want to register as an SPO or DRep, you need to run your test-net node and be able to use the command line (CLI).

You need to generate key pairs for DRep and DRep ID via CLI. This allows you to create a registration certificate which you then sign and submit to SanchoNet.

There is currently no option other than using the CLI (as far as I know). I see this as a barrier for those DReps who are not technically gifted but have something to offer the community.

I assume that the interface will be improved at some later stage of development. Now, it is the highest priority for the team to implement support for governance actions.

Community tools are also being prepared for governance. For example, Cexplorer will have a new tab for Governance and you can already use it for SanchoNet.

Using the CLI is also necessary to delegate ADA to the chosen DRep.

As far as I know, only NuFi Wallet currently plans to support governance on SanchoNet.

Conclusion

For Cardano to enter the Voltaire era, documentation and a technical component must be prepared. Both are being worked on. Feel free to explore SanchoNet. Every member of the community is welcome to actively participate in shaping the Cardano future.