Please describe your proposed solution.

Decentralisation is a core concept in blockchain governance, covering both the structural decentralisation of a blockchain itself (as measured by the Edinburgh Decentralisation Index or EDI), and the social and governance decentralisation of the communities involved with it. There have of course been many discussions in the blockchain space about what “decentralisation” means in practice for different kinds of community - but as yet, we have no way of measuring and comparing.

Having an index to measure social, cultural, and governance decentralisation, on a range of variables reflecting the things that different communities find important, could bring benefits to Cardano as significant as those of the EDI. It would enable us to talk more deeply about organisational decentralisation, by giving us language and concepts to structure the conversations; and it could help individual communities to clarify their distinctive approaches to decentralising, and even help them identify which aspects of their operations they should change if they want to become more decentralised.

So with these ideas in mind, we propose to adapt the approach of the EDI, by devising an index to quantify the decentralisation of a Web3 community or organisation.

We recognise that organisational and governance decentralisation does not present itself uniformly; so we will engage with 6 very different Cardano-based groups (ranging from well-established DAOs, to informal communities) to analyse how they are working towards decentralisation, and which metrics are most relevant to their efforts. By incorporating direct input from these six pioneering communities (yet to be selected - we have a shortlist of those interested, and will select them for their relevance in the Cardano community, their advocacy for decentralised values, and their variety of skills and interests), we will create a tool that not only measures decentralisation, but also captures its nuanced spectrum. This approach will ensure that the index is grounded in real-world experiences, and tailored to reflect diverse decentralisation journeys.

Through iterative testing and refinement with these 6 communities, followed by trials with 10 more groups, we will perfect a weighted index that measures social, cultural and governance decentralisation on a range of criteria. The final deliverable will be an accessible, practical tool for any community to evaluate its decentralisation level; together with detailed, open documentation of our process to enable others to use it for future research and development. The tool will foster greater understanding of organisational decentralisation, and bring clear, actionable insights into the decentralisation process for Cardano communities.

We will approach the work from 3 core perspectives:

1) Being specific

Decentralisation is multi-faceted; and is not a static state, but a process. So to measure it accurately, we need to be specific about which features of a system are being decentralised, and we need to note changes over time. To scope our Index, we will collect data from communities on specific system features:

• the dimensions of decentralisation they try to achieve
• the parameters they control to move the needle on those dimensions
• the indicators that reveal the effects of toggling the parameters
• how these have changed for them over time.

2) Diversity of thought

Blockchain communities are diverse. They learn from a range of sources, and experiment with lessons on checks and balances from a long and diverse legacy of cooperative economics- from the market-based lessons of Hayek, to the economics of “common-pool resources” theorised by Elinor Ostrom and others.

Through co-production, we aim to surface this diversity of thought amongst our 6 core collaborators, leading to an Index that is as heterogeneous as its users.

3) Holding centralisation accountable

Our early scoping research has indicated (see our initial research Miro board) that decentralisation and centralisation are rarely total - they exist on a spectrum, and communities use what works best for them along that spectrum at any given time.

Our Index will highlight centralisation when it appears, and help communities understand its causes, manage it proactively, and take corrective actions. Communities will be able to make informed adjustments to their governance in response to specific indicators, whether it's countering a dominant leader or balancing power disparities.

Using the Index will thus lead to more accountable structures, and a more transparent relationship to decentralisation.

Please define the positive impact your project will have on the wider Cardano community.

Our proposal will benefit the Cardano ecosystem by helping Cardano communities navigate decentralisation, one of the core governance issues they face. Having a developed, nuanced understanding of their own approach to decentralisation will support them in organising their community’s intentions, designing their operations and collaborations, developing their governance, and deciding which tools to use in their day-to-day operations.

The Index also offers potential benefits to Cardano’s governance as a whole. Increasing people’s insight into decentralisation will help them play a role in addressing the challenges Cardano faces as it moves towards Voltaire governance with CIP-1694. The measurement and analysis enabled by the Index will give a new lens through which Cardano can examine decentralisation and consider what it means for our human communities, relationships, and working practices.

In this way, we aim to meet the criteria of this funding category, by expanding the Cardano ecosystem’s capacity to engage with decentralisation and governance, and expanding our communities’ and organisations’ ability to work in decentralised ways.

<u>We will measure our impact by:</u>

• Number and variety of communities engaged as core collaborators
• Qualitative feedback from collaborators about the effectiveness of the devising process
• Qualitative feedback from testers on how well the Index measures decentralisation
• Number of views, comments and other engagement from the wider Cardano community with the Index when it is published, and with our whitepaper and other documentation.

<u>We will share our outputs via:</u>

• The communities who work with us to scope and test the index, and their networks and contacts
• Open-source, transparent, public documentation of our process, maintained on a GitBook mirrored to a GitHub repository
• Public launch of the Index, Whitepaper, and Documentation repo under a Creative Commons licence, via a close-out report to the Catalyst community, and via key channels: Twitter, Cardano Forum, Telegram, Discord, and Town Halls.

What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

Our team is experienced in approaching and navigating relationships with communities and organisations in ways that bring out the best in others. From Wada hubs to community facilitation skills, we have the tools and processes to successfully work with our core 6 communities.

For the development of the Index, we have experience[ writing and contributing to whitepapers](<https://medium.com/<member id='195347' communityId='163'>photrek</member>/cardano-improvement-proposal-1694-ca971194eb20>), deep familiarity with open-source processes and tools, and have already begun standing up the research root for this project. We understand the requirements for privacy and security when handling data, which is important when approaching communities for their participation and consent - we value anonymity to protect data providers, and we build that protection into all of our processes and protocols while enabling customised citations and acknowledgments where needed. We also understand the ethical implications of taking on the task of creating a standard.

We are skilled project managers and budget managers, with multiple successfully completed proposals in Catalyst, including delivering Challenge Team insights, and various businesses and enterprises outside of Cardano, including managing public funding from (for example) the UK Arts Council, National Lottery Fund, and National Archives. In all of these, we have managed funds effectively and transparently; our Catalyst projects demonstrate transparent fund management using GitBook documentation.

Lastly, we have all participated in building governance and infrastructure in Catalyst, helping to realise the vision of an accountable, pluralistic, decentralised innovation fund.

What are the key milestones you need to achieve in order to complete your project successfully?

Milestone 1 (to be completed at the end of Month 1): <u>PLANNING AND SET-UP</u> (15% of budget; c.23,000 ADA)

Outputs

• Literature review of any existing material about measuring decentralisation of communities
• 6 communities onboarded as our core collaborators to develop and test the Index;
• Session plan for the 6 communities, to start working on devising the Index

Acceptance criteria

• Literature review captures relevant and up-to-date material on assessing community decentralisation
• 6 onboarded communities are diverse, and are committed to completing the process
• Intro session is well planned and structured, and is participatory in nature, so that the 6 communities can take a full part in shaping the index

Evidence

• Literature review published on GitBook
• List of 6 participating communities
• Session plan for initial half-day session

>Milestone 2 (to be completed at the end of Month 2): <u>INITIAL SESSIONS</u> (10% of budget; c. 15,400 ADA)

Outputs:

• Deliver initial session to our 6 collaborating communities
• Collate their input on the project GitBook

Acceptance criteria:

• Intro sessions have been engaging for communities (as assessed by feedback at the end), and have given material for us to work with in building a first draft of the Index

Evidence:

• Input and feedback from the sessions collated and published in the project GitBook.

>Milestone 3 (to be completed at the end of month 4): <u>1st DRAFT OF INDEX, AND TESTING</u> (30% of budget; c. 46,120 ADA )

Outputs:

• Ist draft of the Index
• Documentation of our process on GitBook
• Session plan for user testing workshops, including a structure and approach to testing
• Delivery of user testing workshops
• Feedback from workshops, and results of user testing

Acceptance criteria:

• First draft of Index is usable, and clearly incorporates input from literature review, our team’s discussion and ideation, and intro session with 6 communities
• User feedback is clear and well-documented

Evidence:

• First draft of Index, in a text-based format
• Session plan and testing structure
• Documentation of our process on GitBook (may include Miro boards, planning and discussion docs, Loomio material, etc)
• Results of user testing workshop collated on our GitBook.

>Milestone 4 (to be completed at the end of Month 6): <u>NEW ITERATION</u> (30% of budget; c.46,120 ADA)

Outputs:

• Second iteration of the Index, incorporating issues raised by communities
• Engage 10 additional communities to run the new iteration of the Index and share their feedback
• User testing structure defined
• User feedback collated

Acceptance criteria

• Second draft of Index is useable, and clearly addresses issues raised by communities
• User feedback for 2nd iteration is clearly documented

Evidence:

• 2nd draft of Index
• Results of user testing collated on our GitBook

>Milestone 5 (final milestone) (to be completed at the end of Month 7): <u>WHITEPAPER, PEER REVIEW, AND CLOSE-OUT</u> (15% of budget; c. 23,100 ADA)

Outputs:

• Whitepaper on our findings
• Peer review of whitepaper from 3 people in the Catalyst community who have specific domain expertise in the areas covered by the whitepaper.
• Close-out report and video.

Acceptance criteria

• Whitepaper is widely shared within Cardano community and beyond, via Town Halls, Discord, Telegram, X, Cardano Forum
• Peer review process is well documented
• Close-out report is presented in a Town Hall

Evidence

• Whitepaper
• Documentation of peer review process
• Close-out report and video

Who is in the project team and what are their roles?

The 3 core team members are:

<u>Vanessa Cardui:</u> Community engagement professional and community archivist, with 20+ years' experience of working with communities to record and collate their information, archive it, and make it discoverable (see for example https://creationofacommunity.wordpress.com and http://feministarchivenorth.org.uk ). Part of QA-DAO where she leads on documentation (see for example documentation of Catalyst Circle <https://quality-assurance-dao.gitbook.io/catalyst-circle-oversight-v3> ). Part of CGO (Community Governance Oversight) where she facilitated meetings and edited the closing report; founding member of The Facilitators’ Collective; and part of the SingularityNET archives team; part of the SingularityNET DeepFunding Focus Group.

<u>Jeremy Bolander:</u> Integrated systems engineer with 20+ year’s experience as a field troubleshooter for Bergen, meeting people where they are, in some of the harshest environments on earth, in order to keep the lights on. In the Cardano ecosystem you can find him applying systems theory, pattern-spotting, and sensemaking to topics from governance, to systemic change, to analysing community dynamics. When he isn’t scoping standards, he is probably writing, and playing with his kids on their off-the-grid farm, on a remote island off the coast of Alaska.

<u>Mercy A:</u> Has been in the Cardano ecosystem since 2017. Was the Funded Proposer's Rep on Catalyst Circle v3 and is keenly interested in decentralised governance, inclusion and community building. She has a combined 25+ years' experience in Project Management and Engagement (Ghana, Canada) Healthcare (UK, Canada) and brings a wealth of experience and passion to this project. Mercy is responsible for Wada (<https://www.wada.org> ) coordination, and building partnerships**.**

We plan to work collaboratively, rather than defining individual roles, since the nature of the work means each element will benefit from input from all of us. Relevant skills that we all have include:

• facilitation on complex issues;
• experience of the issues around decentralisation for communities;
• understanding of how to measure things in communities;
• qualitative and quantitative data analysis skills;
• community engagement skills;
• insight into complex systems;
• project management experience;
• research and technical writing skills;
• knowledge management;
• documentation.

<u>We will additionally be recruiting</u>

• 6 organisations/communities as core collaborators to help us devise the Index. We already have a shortlist of interested groups, and will select for their relevance in the Cardano community, their advocacy for decentralised values, their variety of skills and interests, their diversity of approach and thinking, and their ability to commit to the whole process.
• 10 additional communities to test the first iteration of the Index. Again, we have a shortlist, and will select in similar ways to the above, although their availability and time commitment will not need to be as extensive.
• One person to join the devising process as a consultant with particular knowledge of the EDI. Again, we have a shortlist of people in mind; the final selection will be largely based on availability.
• 3 people to join a peer review group for our final whitepaper, with domain expertise in decentralised governance. Again, we have a shortlist, and will make our final selection based on their expertise in any specific issues that emerge during the process.

Please provide a cost breakdown of the proposed work and resources.

<u>1) Developing the Index, and managing community engagement: </u>

30,450 ADA x 3 people, <u>= 91,350 ADA</u>

This covers:

• initial outreach to find our 6 test communities and onboard them: 1 day
• Literature review and scoping: 3 days
• Planning sessions for our test communities: 1 day
• Facilitation and documenting a total of 6 sessions with our test communities - first session (repeated x3) to define most important elements to include in the index, 2nd session (repeated x3) to test the index and discuss. Each session will include representatives from 2 communities. 3 days (6 half-days)
• Creating the index: 8 days (4 half-day meetings, 6 half-days working async on shared documents, and 6 half-days individual research)
• Analysing feedback, and writing 1 iteration of the index based on feedback: 5 days

so 21 days’ work (1,450 1440 ADA / day) = 30,450 ADA x 3 people = 91,350 ADA

Note that this, and all our costs, have been calculated on where we anticipate the price of ADA to be in March 2024. Based on our best guess at the exchange rate, this represents an average freelance day-rate for this type of work in the parts of the world where we are based, equating to roughly £360/day.

<u>2) Consultancy: </u>

4 days, 1,450 ADA/ day = <u>5,800 ADA</u>

This covers:

One additional consultant to join us on the writing process, and bring insights from the Edinburgh Decentralisation Index.

<u>3) Incentivising the communities we engage with:</u>

6 communities at 3,840 ADA each, plus 10 more at 960 ADA each <u>= 32,640 ADA</u>

This covers:

• initial group: 3 members of a community attend 2 half-day sessions with us (3 people x 640 ADA per person, total 1,920 ADA per session, x 2 sessions = 3,840 ADA). Multiplied by 6 communities = <u>23,040 ADA</u>
• additional 10 communities: payment for their time to run the Index for their community and share results with us. 960 ADA x10 communities <u>= 9,600 ADA</u>

<u>4) Whitepaper and peer review: </u>

14,400 ADA

This covers:

We will write and publish a whitepaper about our discoveries, covering the Index itself, our background thinking, our working process, insights from our 6 core communities and from our 10 additional testers, and our conclusions. The first draft will then be peer-reviewed by a team of 3 reviewers from the Catalyst community who have specific domain expertise in the areas covered by the whitepaper.

• Writing whitepaper (including 2 drafts, edit, proofread, layout, and publicising/sharing) <u>= 9,600 ADA</u>
• Peer review: 2 meetings x 3 people x 800 ADA per meeting (includes their time in reading and reflecting on the Whitepaper) <u>= 4,800 ADA</u>

<u>5) Documentation: </u>

9,700 ADA

This covers:

Capturing thinking processes, research, results of meetings, feedback from communities, iterations of the Index, and process of writing and peer-reviewing the Whitepaper, on a project GitBook

<u>6) Project management: </u>

5,645 ADA

This covers:

Arranging meetings and managing communications with our collaborators; publicity and sharing with the community; wallet and budget management; milestone reporting and monthly reporting; close-out report and video.

total: 153,735 ADA

How does the cost of the project represent value for money for the Cardano ecosystem?

To negotiate the exchange rate when compensating contributors to this proposal and paying for services and tools, despite the recent rally in ADA price, we are anticipating continued market macro conditions that will suppress ₳ prices.

Our pay rates are average freelance rates for this type of work in the countries where we are based, reflecting our skills and experience. (for example, see this 2022 survey in the UK, which assessed average freelance day rates as £368, or approx 1,268 ADA at the current exchange rate when this proposal was submitted.) Note that freelance rates are typically higher than salaried rates, because they take into account the employment overheads of the worker (for example, unlike salaried employees, freelancers do not get sick pay, holiday pay, national insurance or pension contributions; taxes are not deducted at source; and they cover all overheads for their own workspaces.)

Our approach of paying communities for their input represents an important way to recognise and reward their time, and will build their engagement. It has been consistently shown that incentives increase response and participation rates. Furthermore, monetary incentives outperform all other incentives due to the following characteristics:

• Transparency — Giving money is simple and straightforward. People know exactly what they’re going to get, without any extra hoops to jump through. Money is also guaranteed.
• Immediacy — Promised incentives (“you’ll get X at some point in the future”) are generally less effective than instant gratification. Cash delivery is easy to facilitate in both in-person and remote participation. Payment can be made instantaneously, sometimes directly to wallets or accounts.
• Flexibility and convenience — Participants can take those funds and apply them as they see fit.

While incentives can carry risks for the integrity of the data collected in participatory research and input, we plan to mitigate those risks by only approaching communities that are already active in our area of research, specifically adopting or seeking to adopt tooling for decentralisation (DAOs).

Based on the above, plus the complexity of the work and its potential long-term benefit to the Cardano ecosystem, our budget represents excellent value for money.