Understanding the Cardano Constitution

The following Tenets shall guide all Cardano Community members and proposed governance actions shall be evaluated in accordance with these Tenets. The order in which the Tenets below appear is not intended to represent a priority among Tenets. TENET 1 Transactions on the Cardano Blockchain shall not be slowed down or censored and shall be expediently served for their intended purpose. TENET 2 The …

1. The Cardano Blockchain shall operate in accordance with the Cardano Blockchain Guardrails Appendix to this Constitution. The Cardano Community may digitally codify certain Guardrails such that the Guardrails are directly programmed and implemented on the Cardano Blockchain using on-chain Guardrails Script or built-in ledger rules. 2. In the event there are inconsistencies between a Guardrail …

1. No formal membership shall be required to use, participate in and benefit from the Cardano Blockchain. Cardano Community members are entitled to the rights, privileges, and protections of this Constitution, and are accordingly expected to support and uphold this Constitution, maintain the integrity of the ecosystem, participate in governance, and resolve disputes transparently. 2. Cardano Com…

1. Ada owners are entitled to access and participate in the on-chain decision-making processes of the Cardano Blockchain ecosystem, including voting, proposing changes to the governance structure in accordance with the Guardrails, and otherwise taking part in on-chain governance actions. 2. Ada owners can directly participate in governance actions by registering as DReps themselves or by delegat…

1. The Cardano Blockchain is governed by a decentralized, on-chain model that, where beneficial, uses smart contracts and other blockchain tools to facilitate decision-making and ensure transparency. 2. Three independent voting bodies - DReps, SPOs, and the CC - participate in on-chain voting; anyone holding multiple roles must publicly disclose such overlaps before engaging in any on-chain gove…

1. DReps have voting power equal to the number of lovelace delegated to them. 2. DReps may vote on all types of governance actions. 3. DReps shall ensure that any compensation received in connection with their activities as a DRep is publicly disclosed in a timely manner through relevant governance communication channels. 4. DReps shall not offer or provide compensation to an ada owner in exch…

1. SPOs shall vote on the following governance actions: "No Confidence", "Update Committee", "Hard Fork Initiation", "Parameter Update" that affect security-relevant parameters, and "Info" actions.

1. To ensure transparency in on-chain governance, proposed governance actions shall follow a standardized and legible format before being recorded or enacted on-chain. This format shall include a URL hosting a document that outlines additional context for the proposed governance action, and the hash of this document. The document hosted by such a URL shall be immutable and incapable of being alte…

A "Treasury Withdrawals" action must, in addition to the requirements at Section 6, meet all of the following requirements: 1. "Treasury Withdrawals" actions must specify the terms of the withdrawal. This shall include: the purpose of the withdrawal, the period for delivery of proposed activities which the withdrawal shall be used for, the relevant costs and expenses of the proposed activities, c…

1. A CC shall be established as the branch of Cardano's on-chain governance process that ensures governance actions to be enacted on-chain are consistent with this Constitution. 2. Each CC member shall have one vote. 3. No governance action - other than a "No Confidence" or "Update Committee" action - may be implemented on-chain without affirmation by a requisite percentage of CC members. 4. T…

1. The CC shall be composed of such number of members and serve such term lengths as are sufficient to assure the ongoing integrity of the Cardano Blockchain, as determined from time to time by Ada owners. 2. To assure continuity in the operation of the CC, the terms for CC members shall be staggered.

1. The CC shall be considered to be in one of the following two states at all times: a state of confidence or a state of no confidence. In a state of no confidence, members of the then-standing CC must be reinstated or replaced using the "Update Committee" action before any other on-chain governance action, other than "Info" actions, may go forward. 2. The Cardano Community shall establish and m…

1. CC processes shall be transparent, and the CC shall publish each decision. 2. When voting that a governance action proposed to be executed on-chain is unconstitutional, each CC member casting such a vote shall set forth the basis for its decision with reference to specific Articles of this Constitution or provisions of the Cardano Blockchain Guardrails Appendix that are in conflict with a giv…

Amendments to this Constitution, including the Cardano Blockchain Guardrails Appendix, shall require approval via an on-chain governance action supported by at least 65% of the active voting stake at that time, unless a different threshold is expressly provided in the Cardano Blockchain Guardrails Appendix for the amendment of a particular Guardrail, in which case that threshold shall apply.

To implement Cardano Blockchain on-chain governance, it is necessary to establish sensible Guardrails that will enable the Cardano Blockchain to continue to operate in a secure and sustainable way. This Appendix sets forth Guardrails that must be applied to Cardano Blockchain on-chain governance actions, including changes to the protocol parameters and limits on treasury withdrawals. These Guardra…

Below are Guardrails and guidelines for changing updatable protocol parameter settings via the "Parameter Update" action such that the Cardano Blockchain is never in an unrecoverable state as a result of such changes. Note that, to avoid ambiguity, this Appendix uses the parameter name that is used in "Parameter Update" actions rather than any other convention. ##### GUARDRAILS PARAM-01 (y) Any pr…

The below protocol parameters are critical from a security point of view. #### Parameters that are Critical to the Operation of the Blockchain - maximum block body size (maxBlockBodySize) - maximum transaction size (maxTxSize) - maximum block header size (maxBlockHeaderSize) - maximum size of a serialized asset value (maxValueSize) - maximum script execution/memory units in a single bloc…

The overall goals when managing economic parameters are to: 1. Enable long-term economic sustainability for the Cardano Blockchain; 2. Ensure that stake pools are adequately rewarded for maintaining the Cardano Blockchain; 3. Ensure that ada owners are adequately rewarded for using stake in constructive ways, including when delegating ada for block production; and 4. Balance economic incentive…

The overall goals when managing the Cardano Blockchain network parameters are to: 1. Match the available Cardano Blockchain Layer 1 network capacity to current or future traffic demands, including payment transactions, layer 1 DApps, sidechain management and governance needs 2. Balance traffic demands for different user groups, including payment transactions, minters of Fungible/Non-Fungible Tok…

The overall goals when managing the technical/security parameters are: 1. Ensure the security of the Cardano Blockchain network in terms of decentralization and protection against adversarial actions 2. Enable changes to the Plutus language #### Triggers for Change 1. Changes in the number of active SPOs 2. Changes to the Plutus language 3. Security threats 4. Cardano Community requests ####…

The overall goals when managing the governance parameters are to: 1. Ensure governance stability 2. Maintain a representative form of governance #### Triggers for Change Changes to governance parameters may be triggered by: 1. Cardano Community requests 2. Regulatory requirements 3. Unexpected or unwanted governance outcomes 4. Entering a state of no confidence #### Counter-indicators Change…

All network parameter changes must be monitored carefully for no less than 2 epochs (10 days) - Changes must be reverted as soon as possible if block propagation delays exceed 4.5s for more than 5% of blocks over any 6 hour rolling window All other parameter changes should be monitored - The reversion plan should be implemented if the overall effect on performance, security, functionality, or …

Some fundamental protocol parameters cannot be changed by the "Parameter Update" action. These parameters can only be changed in a new Genesis file as part of a hard fork. It is not necessary to provide specific guardrails on updating these parameters.

"Treasury Withdrawals" actions specify the destination and amount of a number of withdrawals from the Cardano Treasury. ##### GUARDRAILS TREASURY-01a (x) A Net Change Limit for the Cardano Treasury's balance per period of time must be agreed by the DReps via an on-chain governance action with a threshold of greater than 50% of the active voting stake TREASURY-02a (x) Withdrawals from the Cardano B…

The "Hard Fork Initiation" action requires both a new major and a new minor protocol version to be specified. - As positive integers As the result of a hard fork, new updatable protocol parameters may be introduced. Guardrails may be defined for these parameters, which will take effect following the hard fork. Existing updatable protocol parameters may also be deprecated by the hard fork, in whi…

"Update Committee" actions may change the size, composition or required voting thresholds for the Constitutional Committee. ##### GUARDRAILS UPDATE-CC-01a (x) "Update Committee" actions must not be ratified until ada owners have ratified through an on-chain governance action this Constitution

"New Constitution" actions change the hash of the on-chain Constitution and the associated Guardrails Script. ##### GUARDRAILS NEW-CONSTITUTION-01a (x) A New Constitution or Guardrails Script governance action must be submitted to define any required guardrails for new parameters that are introduced via a Hard Fork governance action NEW-CONSTITUTION-02 (x) If specified, the new Guardrails Script m…

"No Confidence" actions signal a state of no confidence in the governance system. No guardrails are imposed on "No Confidence" actions. ##### GUARDRAILS - None

"Info" actions are not enacted on-chain. No guardrails are imposed on "Info" actions. ##### GUARDRAILS - None

The protocol parameters are grouped by type, allowing different thresholds to be set for each group. The network parameter group consists of: - maximum block body size (maxBlockBodySize) - maximum transaction size (maxTxSize) - maximum block header size (maxBlockHeaderSize) - maximum size of a serialized asset value (maxValueSize) - maximum script execution units in a single transaction …

The Cardano Blockchain was established in 2017. In July 2020 the Cardano Blockchain was expanded to include independent block validators and in September 2024 an on-chain governance system was introduced. This Constitution outlines the rights and responsibilities of governance actors in the decentralized system who represent the ada owners; ada is the governance token of the Cardano Blockchain. Th…

The drafters of the Constitution, together with other participants from the Cardano Community, have published and in the future may publish guidance for interpreting the Constitution, including, without limitation, a definition booklet that has been released contemporaneously with the on-chain ratification of the Constitution. So long as any such published guidance has been hashed to the Cardano B…