Joining the Cardano dRep: Reward Schemes and Onboarding

The second session of DRep Chains’s webinar series (funded by the project catalyst f12 round) provides more insight into Cardano’s new dRep ecosystem. The program which was held on Saturday, October 19, 2024, and titled “Reward Schemes and Onboarding: Joining the dRep Ecosystem” had an objective to create more awareness for both new and experienced members in the community about the governance roles and responsibilities, an updated onboarding and registration processes for dReps and interested Ada holders.

The host started the program with a recap from the first webinar, touching on important points like;
⦁ What is the concept of delegated representatives (dReps) and their roles?
⦁ Governance structures and the various institutions, constitutional representatives, and notion of democratic consent.
⦁ The process of on-chain governance and the importance of voters, SPOs, and constitutional committees.
⦁ Non-binding dRep code of conduct and the Cardano constitutional guardrails.

Key takeaways from the session
The focus of the second webinar was the demo registration process for dReps, however, the presenter, Nana Sarfo, introduced the presentation with a question to the audience and participants were encouraged to share ideas on “How Can dRep incentives be sufficient to promote expertise and diversity”.

Highlight 1: The first highlight of the webinar is the proposed reward schemes presented for active dReps. The 5 variants of how to reward dReps provide the necessary information on compensation packages for all participating dReps during voting.
⦁ Equal rewards for the top dReps by stake (Variant 1A) proposes “m” as 10 and “r” as Ada 500 – this scheme ranks dReps based on the number of stakes delegated to them (including their own). Which means only top dReps “m” receive equal rewards of “r” Ada 500 and the rest receive nothing.

⦁ Equal rewards for the top dReps by stake above a minimum threshold (Variant 1B) – This scheme is similar to variant 1A, however limits rewards to dReps who go over the 3.33% threshold. It proposes that about 30 dReps can be rewarded with Ada 500 only if they pass the threshold.

⦁ Proportional rewards for top dReps by stake (Variant 2A) – In this scheme, the top ‘m’ DReps are selected and they are paid a reward ‘B’ proportional to their stake. If ‘m’ = 10 and reward ‘B’ = 5000, the reward will be distributed proportionally to the stake among the top 10 DReps.

⦁ Proportional Rewards for Top DReps by Stake Above a Minimum Threshold (Variant 2B) – Only DReps who reach the required threshold are entitled to the reward. Once the number of DReps to whom the reward is to be paid is known, it will be paid proportionally to the delegated stake of DReps. If ‘m’ = 30 and the reward budget ‘B’ = 5000, only those DReps who reach the threshold of 3.33% will receive a proportional part of the reward.

⦁ Proportional Rewards for Top DReps by Stake, with a Bonus (Variant 3) – This variant combines a proportional reward scheme with a bonus for the top ‘m’ DReps. All DReps receive a reward from the budget ‘B1’, equal to their proportional share, in terms of stake delegated to them. Then, the top ‘m’ DReps in the ranking receive an extra reward from the budget ‘B2’. B2 reward can be paid by using either one of variants 1A, 1B, 2A, or 2B.

Highlight 2: The audience is taken through the dRep registration demo part of the webinar session. First emphasis on the requirements of registering as a dRep:
⦁ Cardano Mainnet wallet (web version) – Supported options are Eternl, Lace, Typhon and Yoroi.
However if your wallet is not supported, the solution is to import your existing passphrase onto supported govtool wallets.

⦁ Wallet must contain an active balance of Ada 500

⦁ Visit the ⦁ gov.tools website to become a dRep

Watch: How webinar recap on how to become a dReps

Highlight 3: The delegation process provides a step by step instruction on how Ada holders in the community can delegate their voting power to registered dReps of choice.

Note: Ada holders are required to have a wallet balance of Ada 10

Delegation Process
Step 1: Visit the website gov.tools and toggle to the dRep direction section
Step 2: Browse through the list and explore the details of already registered dReps
Step 3: Only choose dReps with the tag “active” and copy their assigned dRep ID
Step 4: Click connect to delegate and follow the prompt to connect your wallet.
Step 5: Follow the instructions in the video – here

Audience Engagement
Audience turnout for the second webinar was about 60 participants who actively engaged in the zoom chat box, during polls and especially the trivia session at the end of the presentation.

Image – Poll responses from webinar 2

For the trivia game session, 57 out of 60 webinar participants answered the assigned questions.

See image below

Overall, the objective of the second webinar session to demonstrate to the audience the onboarding process for dRep registration and the delegation process was successfully executed. And as reward schemes are still an ongoing conversation, participants were encouraged to contribute to the discussion and also explore more on Cardano’s governance actions.