Cardano Improvement Proposals (CIPs)

CPS-0020 addresses the lack of structured incentivization for key participants in the Cardano governance framework. Currently, the system relies heavily on the altruism of Delegated Representatives (DReps), Constitutional Committee (CC) members, and ADA holders, which poses risks of voter apathy, governance capture, and centralization of power.

Key Stakeholders Identified:

• DReps (Delegated Representatives): Need compensation to sustain the time required for research and community engagement.
• CC (Constitutional Committee) Members: Require incentives to manage the high workload of reviewing governance actions.
• ADA Holders: Need motivations to stay actively engaged with their chosen DReps to prevent passive delegation and governance stagnation.
• SPOs (Stake Pool Operators): While already incentivized for staking, they lack direct rewards for deep governance participation, which can lead to passive voting.

Primary Objective: To establish a balanced, robust incentivization framework that encourages consistent, informed, and diverse participation while preventing the misuse of reward mechanisms and ensuring sustainability relative to the yearly ADA inflows to the treasury.

CIP-0118 introduces Nested Transactions, a ledger-level mechanism for composing partially valid transactions into balanced batches. This allows for the settlement of 'intents'—such as atomic swaps, Babel fees (paying fees in non-ADA tokens), and DApp fee sponsorship—without requiring centralized exchanges or complex smart contract interactions.

Core Concept: The Batch Model

Instead of single, self-contained transactions, the ledger supports batches consisting of:

1. A Top-Level Transaction: The primary transaction that must be fully balanced and provides the necessary collateral for all included sub-transactions.
2. Sub-transactions: One or more partially valid transactions (e.g., unbalanced transactions or those missing fees) that are resolved by the top-level transaction within the same batch.

When a complete batch is applied, the ledger update is valid, even though individual sub-transactions would fail if processed in isolation.

CPS-0032 identifies the lack of a common resolver-interoperability framework for Cardano wallets and dApps that support multiple naming and handle providers. Currently, different providers operate independently with unique Policy IDs, resolver endpoints, and metadata formats, leading to several critical issues:

• Ambiguous Resolution: Without a standard, wallets may resolve a handle to the wrong provider, risking fund loss if two providers use the same visible format under different Policy IDs.
• Discovery Friction: There is no standard mechanism for wallets or dApps to discover existing providers, their namespaces, or their technical capabilities.
• Inconsistent UX: Wallet implementations vary regarding how they display provider context, handle ambiguous inputs, or warn users about resolved address types (e.g., script addresses).
• Security Risks: There are no defined standards for evaluating provider trustworthiness, detecting malicious providers, or handling provider abandonment/migration.

This document defines the problem space and the required properties for a future technical solution (CIP) to ensure safe, transparent, and interoperable handle resolution.

Ouroboros Phalanx is a proposed consensus extension for Cardano designed to mitigate grinding attacks and improve settlement performance. It strengthens the VRF-based randomness generation sub-protocol used for leader election by introducing a cryptographic primitive that is computationally expensive for adversaries but lightweight for honest participants.

Key Objectives:

• Mitigate Randomness Manipulation: Addresses CPS-0021 by raising the cost of grinding attacks by approximately $10^{10}$.
• Improve Settlement Speed: Addresses CPS-0017 by reducing settlement time by approximately 20–30% compared to unmodified Praos.

Core Mechanism:

The protocol introduces the $\Phi$ (Phi) Stream, which utilizes Verifiable Delayed Functions (VDFs) (specifically recommending Wesolowski's VDF) to ensure that biasing slot leader distributions becomes economically infeasible at scale.