Please describe your proposed solution

==> The need for transparent evaluations in DAO governance:

Background: Within the broader Cardano ecosystem, the governance model proposed under CIP-1694 introduces a structured approach where DReps, Stake Pool Operators (SPOs), and the Constitutional Committee (CC) all have distinct but complementary roles:

• DReps: Similar to their role in Catalyst, DReps in Cardano are tasked with representing the ada holders who delegate their voting power to them. They participate in the governance by voting on broader network decisions, such as Cardano Improvement Proposals (CIPs) and other crucial governance actions.
• Stake Pool Operators (SPOs): SPOs maintain the Cardano network infrastructure by running nodes. In the governance model, they also have the right to submit governance actions and vote on them.
• Constitutional Committee (CC): The CC is a formal body to oversee the constitutionality of governance actions. They review proposals and governance actions to ensure they adhere to the foundational principles laid out in Cardano's "constitution," acting as a safeguard against potential abuses of power.

While the introduction of DReps in Catalyst promises several benefits, it also raises some concerns:

1. Conflict of Interest: DReps hold substantial voting power and could potentially vote on their own projects for personal gain, risking the integrity of the decision-making process.
2. Risk of Corruption: The influential position of DReps could make them targets for bribery and undue influence from project teams.
3. External Influence: The involvement of dReps could attract large investors ("whales") and investment funds, potentially leading to collusion and favoritism in project selections.

These issues highlight the need for reliable governance and transparency measures to prevent abuses and ensure that dReps contribute positively to the Catalyst ecosystem. Our proposal is intended to prevent DReps from exploiting their position unnoticed, and at the same time we want to give those DReps who do continuously valuable work for the ecosystem the opportunity to be independently assessed and rewarded with a high reputation.

==> Proposal Objectives:

With the introduction of the proposed evaluation framework for DReps, we want to achieve the following aspects for the community:

• <u>Trust Building: </u>Transparency is foundational to building and maintaining trust within any community. Especially in DAOs, where centralized oversight does not exist, it is crucial that participants trust the processes and the individuals making decisions on their behalf.
• <u>Accountability:</u> When actions and decisions are visible and traceable, DReps are more accountable for their actions.
• <u>Informed Decision Making:</u> Transparency enables the community to make more informed decisions about whom to trust and delegate their voting power to.
• <u>Reducing Corruption and Bias:</u> Transparent evaluations helps to minimize the risk of corrupt practices and biases as every action and its justification are open to scrutiny.
• <u>Community Engagement:</u> When members feel confident that the system is transparent and fair, they are more likely to participate actively in Governance.

==&gt; Components of our proposed DREP evaluation system:

• <u>Quantitative Metrics</u>: Our framework will incorporates a set of quantitative metrics that objectively measure the performance of DREPs based on their voting behavior and the outcomes of their decisions. These metrics are designed to be transparent and easily understandable, ensuring that all community members can see how each metric is calculated and what it represents:
• Voting Consistency: Measures how consistently DReps vote in line with the community preferences or successful project outcomes.
• Impact Score: Assesses the influence of DReps' votes on the success rate of projects they support, calculated through outcomes like project completion rates and post-implementation reviews.
• Participation Rate: Tracks the frequency and regularity of DReps involvement in voting and other governance activities, highlighting their commitment to their role.
• <u>Qualitative Assessments: </u>To complement the quantitative data, the framework integrates qualitative assessments that provide deeper insights into the DReps' contributions. These assessments are gathered through community feedback mechanisms and peer reviews, adding a layer of subjective evaluation that captures aspects of performance not easily quantified.
• Community Feedback: Allows community members to submit reviews or ratings based on their interactions and experiences with DReps. This feedback can include aspects such as communication quality, responsiveness, and advocacy for community interests.
• Expert Reviews: Engages subject matter experts to assess the strategic impact and foresight of DReps' decisions, providing insights into their understanding and handling of complex governance issues.
• <u>Reputation Scores: </u>Both quantitative metrics and qualitative assessments feed into a dynamic reputation scoring system. This system calculates a composite score for each DRep, reflecting their overall effectiveness and reliability as a representative. The reputation scores are updated regularly to reflect the most current data, ensuring they remain relevant and timely.
• <u>On-chain Integration: </u>To ensure integrity and prevent manipulation, all aspects of the evaluation process, especially the collection of votes and feedback, are recorded on the blockchain.
• <u>Community Involvement and Oversight</u>: Our intension is to design this evaluation framework with strong community involvement. We want to facilitate open forums for feedback on the system, and give the possibility for community-driven modifications to ensure that the evaluation framework remains aligned with the needs and values of the Cardano and Catalyst community.

==&gt; Technical Approach:

1. Data Collection and Analysis Tool

• Tool to extract and analyze voting data from Cardano's blockchain.
• Data Correlation: We will use algorithms to correlate voting behaviors with project outcomes in Catalyst.

2. Community Interface

• Simple User Dashboard for viewing DReps' metrics and reputation scores.
• Feedback Portal for submitting community feedback.
• Visualization Tools to display data trends and insights.

3. Quantitative and Qualitative Data Processing

• Metrics Engine to calculate quantitative metrics like Voting Consistency and Impact Score.
• Assessment Module to analyze community feedback and expert reviews.

4. Reputation Scoring System

• Scoring Algorithm to compute composite reputation scores from quantitative and qualitative data.
• Regular Updates: Automate data pipelines to keep reputation scores current.

5. On-Chain Integration

• Smart Contracts for secure, transparent recording of votes and feedback.

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

=&gt; Benefits for the Ecosystem:

This DRep evaluation system will significantly improve transparency and accountability within Cardano's governance by providing clear, data-driven insights into the performance of DReps. By building trust in DReps and their voting decisions, this protocol will help ensure that delegates can make informed decisions about who to delegate their voting rights to. Ultimately, this will lead to more effective governance that reflects the will of the broader Cardano community.

The protocol will also contribute to the long-term stability of Cardano's governance by rewarding DReps that continuously make positive contributions and penalising poor performance, reducing the risk of governance abuse or stagnation. Improved governance will make the Cardano ecosystem a stronger, more resilient platform for decentralised decision-making, attracting more participants and ensuring the longevity of decentralised governance within Cardano.

=&gt; How we measure success:

<u>Quantitative and Qualitative Metric:</u>

• Improved Community Satisfaction and Trust in DReps:
• Metric: Measure community satisfaction with DReps and their governance decisions.
• Goal: Improve community satisfaction and trust levels over time, to show that the evaluation system is effective in promoting better governance.
• Dynamics of Delegated Voting Power:
• Metric: Track changes in the number of delegations, total voting power, and fluctuations in delegated ADA to individual DReps.
• Goal: Maintain or increase the total delegated voting power and the number of delegations to DReps over time, while minimizing large swings in delegated power away from any particular DRep. Positive changes in these metrics would suggest that DReps are perceived as effective and trustworthy.
• Voting Participation Rates:
• Metric: Track the percentage of voting participation by DReps across governance proposals.
• Goal: Maintain or increase DRep voting participation, targeting an 85% voting rate across governance actions over the first year.

<u>Adoption and Integration Metrics:</u>

• dApp and Governance Platform Adoption:
• Metric: Track the number of governance platforms, dApps, and tools that integrate the DRep Evaluation Protocol.
• Goal: Achieve integration with at least 3 governance dApps within the first year.
• DRep Participation in Evaluation System:
• Metric: Measure the percentage of active DReps participating in the evaluation system and engaging with their reputation scores.
• Goal: Ensure that 70% of DReps are actively engaging with their evaluations and reputation feedback to improve governance participation.

=&gt; How we share the outputs:

• Open-Source: All code, algorithms, and smart contracts developed for the DRep Evaluation Protocol will be made open-source and published on GitHub.
• Documentation and Guides: We will provide detailed documentation outlining how to use, integrate, and improve the DRep evaluation system.
• Regular Reporting: Updates on the protocol’s progress, key metrics, and user feedback will be shared with the Cardano community through Project Catalyst and blog posts.
• Community Workshos and Feedback Sessions: We will hold a feedback sessions to engage the community, ensuring that the protocol evolves in line with the needs and values of the Cardano ecosystem.

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?

=&gt; POC work:

This proposal will build on top of the successful proposal of Fund 11 and Fund 12 by using some of their infrastructure and algorithms:

• Reputation Scores for Catalyst Reviewers: https://projectcatalyst.io/funds/11/cardano-use-cases-concept/reputation-scores-for-catalyst-proposers-and-reviewers-by-lidonation-and-trustlevel
• Redesign of Proposal Review System of Catalyst:https://projectcatalyst.io/funds/12/cardano-open-developers/redesign-of-catalysts-proposal-review-system-and-methodology-by-trustlevel-photrek-and-lidonation

=&gt; Know-how and Partnerships:

TrustLevel has a proven track record of successful participation in and contribution to the voting and reviewing processes across multiple platforms, including Project Catalyst, Arbitrum, and SingularityNet, over the last few years. Our experience has equipped us with a deep understanding of the nuanced challenges and specific requirements of effective voting and reviewing systems.

We have active collaborations with the following teams in Cardano:

- Lidonation: Reputation-Scores for Catalyst Reviewers (https://projectcatalyst.io/funds/11/cardano-use-cases-concept/reputation-scores-for-catalyst-proposers-and-reviewers-by-lidonation-and-trustlevel)

- Photrek: Development of a community tool for voting calculations and community engagement in SingularityNet (https://proposals.deepfunding.ai/graduated/accepted/ed600af3-885c-45bc-a874-56d2dde371ce)

- SidanLab and MeshJS: Smart Contract Development (https://projectcatalyst.io/funds/11/cardano-open-developers/aiken-open-source-smart-contract-library-by-meshjs-and-trustlevel)

=&gt; Validation of Feasibility:

• Pilot Testing: We will conduct tests to refine the protocol and framework by using real data and scenarios to ensure that the system performs as intended.
• Feedback Loops: We will implement feedback mechanisms to gather insights from the community, which will be used continuously to improve the system.

=&gt; Community Collaboration:

There are already a number of projects around DReps being developed by Lidonation, NMKR, Photrek and others. We have active collaborations or are in contact with most of these initiatives and are very interested and open to deeper collaboration to join forces with the community.

=&gt; Contributions and Publications:

We have published several articles and blogs about our findings and insights into the voting and reviewing processes:

• Reputation POC work: https://github.com/TrustLevel
• Impact Assessments: https://docs.google.com/document/d/1JEti-4I9l-3LsAvf_JaTRXVsIRgPooffhcGO1zQjzr0/edit?usp=sharing
• Proposal Evaluations in Grant programs: https://medium.com/@dominik_36234/from-chaos-to-clarity-proposal-evaluations-in-web3-grant-programs-22d13222c69e
• Analysis of Decentralized Innovation Funds: https://medium.com/@dominik_36234/searching-for-signals-of-trust-in-an-ocean-of-noise-lessons-from-the-fellowship-part-2-acad30e9ae45
• Reputation Protocols: https://docs.google.com/document/d/1ghLOLB9sUMuyxlQ8GXkSsH10_k0gPN3R90FyD3ZBwm0/edit?usp=sharing

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

Milestone 1: Architecture and System Design

Goal: Design a comprehensive architecture for the DRep evaluation system, including quantitative and qualitative metrics, reputation scoring, and on-chain integration.

Deliverable:

• A detailed architecture document outlining the data collection methods, metric calculations (Voting Consistency, Impact Score, Participation Rate), and qualitative assessments.
• Design of the reputation scoring algorithm and how it integrates with on-chain recording of votes and feedback.
• Flow diagrams for user interactions, data collection, and scoring updates.

Acceptance Criteria:

• Architecture must cover all technical components, including data extraction, analysis, reputation scoring, and blockchain integration.
• The design must demonstrate how the system ensures transparency and accountability.

Evidence:

• Published system architecture document and flow diagrams on Github.

Milestone 2: Data Collection and Analysis Tool Development

Goal: Develop tools for extracting and analyzing voting data from Cardano’s blockchain and correlating DRep voting behaviors with the effectiveness of voting outcomes.

Deliverable:

• A tool for collecting voting data from Cardano’s blockchain..
• Algorithm for correlating DRep voting behaviors, including success rates and community impact.
• Initial testing of data extraction and analysis.

Acceptance Criteria:

• The tool must successfully extract and analyze voting data and show correlations between DRep behavior and effectiveness of voting outcomes.
• The data collection tool must be secure and efficient, handling large datasets without compromising accuracy.

Evidence:

• Published code for data collection and analysis tool on Github.
• Test cases showing successful extraction of voting data and analysis results.

Milestone 3: Community Interface Development

Goal: Build a user-friendly interface that displays DRep metrics and reputation scores, and allows community members to submit feedback.

Deliverable:

• A simple web dashboard displaying DRep metrics (Voting Consistency, Impact Score, Participation Rate) and dynamic reputation scores.
• A feedback portal where community members can submit reviews or ratings of DReps.
• Visualization tools for displaying trends and insights about DRep performance over time.

Acceptance Criteria:

• The interface must display real-time DRep metrics and reputation scores.
• Community members must be able to submit feedback through the portal.
• Data visualization tools must clearly present trends and insights.

Evidence:

• Deployed web interface or prototype for user testing.
• Published UI code on Github with a demo video showing the user flow.

Milestone 4: Reputation Scoring System and Integration

Goal: Develop and integrate the reputation scoring system that calculates composite scores from both quantitative and qualitative data.

Deliverable:

• Implementation of the scoring algorithm that calculates reputation scores based on voting metrics and community feedback.
• Integration of the scoring system into the dashboard, with automatic updates reflecting current data.
• Testing of the algorithm to ensure accurate, fair, and dynamic scoring.

Acceptance Criteria:

• The scoring system must successfully calculate and update DRep reputation scores based on predefined metrics.
• The integration must ensure that reputation scores are up-to-date and reflect the most recent data.

Evidence:

• Published code for the scoring algorithm and integration on Github.
• Test cases demonstrating the successful calculation and updating of reputation scores.

Final Milestone: Goal: Summarize the project’s outcomes, technical achievements, and future potential.

Deliverable:

• A comprehensive project close-out report detailing each milestone, technical results, and next steps for community feedback and improvements.
• Final documentation for developers and community members, including a user guide and detailed architecture.

Acceptance Criteria:

• The report must cover each milestone, the results achieved, and any feedback received.
• All relevant code, documentation, and deliverables must be publicly accessible.

Evidence:

• Published project close-out report on a shared platform.
• All code, documentation, and deliverables available on Github.

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

TrustLevel, founded by Dominik Tilman in 2023, develops tools and protocols to measure the reliability of data, information and reputation in decentralized ecosystems. Supported by grants from Cardano, SingularityNet and Arbitrum, our main focus is on creating a Decentralized Reputation Layer (DRL). Our tools, including the Voting Calculation for DeepFunding and a ZK Voting Protocol, enable privacy-preserving reputation management across governance, DeFi, and cross-chain applications. All outputs are open-source.

=&gt; TrustLevel Core Team:

• Dominik Tilman: Project and Technical Lead. Dominik has been actively engaged since Fund 3 in Project Catalyst and involved in multiple funded projects. All proposals are either successfully delivered or on track. He is founder of TrustLevel.io &amp; Conu21.com and has 15+ years experience in innovation management and company building.
• Juana Attieh: Product Lead. She plays an active role in decentralized governance, contributing as a member of the Membership and Community Committee, and providing her expertise as an advisory board member and board observer for Intersect. Juana is a co-founder of the Cardano MENA community and Off-chain Toronto, she also serves as CSO at AMLOK.tech. She leads the Applications Circle for the LALKUL dRep, focusing on advancing decentralized decision-making. Her work reflects a passion for community-led infrastructures and governance, aimed at creating sustainable, decentralized societies.
• Roman Preuss: Full-Stack Developer
• Josch Rossa: Full-stack developer and LLMs
• Alex Ramalho: Full Stack AI Developer
• Sergey K: Blockchain Developer

Please provide a cost breakdown of the proposed work and resources

Budget Breakdown: 200,000 ADA Total

We have calculated with an hourly rate of 75 USD (at 1 ADA = 0,4 USD).

Milestone 1: Architecture and System Design – 60,000 ADA

• Detailed design of the DRep evaluation framework, including data collection, scoring system, and on-chain integration.

Milestone 2: Data Collection and Analysis Tool Development – 60,000 ADA

• Development of tools for extracting and analyzing voting data from Cardano’s blockchain.

• Correlation algorithms to link DRep voting behavior with voting outcomes.

Milestone 3: Community Interface Development – 40,000 ADA

• Creation of a user dashboard to display DRep metrics and reputation scores.

• Feedback portal and data visualization tools.

Milestone 4: Reputation Scoring System and Integration – 30,000 ADA

• Development and integration of the scoring algorithm into the interface.

• Automated data updates for real-time reputation scores.

Milestone 5: Project Close-Out Report – 10,000 ADA

• Final project report and documentation.

• Publication of all code and deliverables on Github.

No dependencies.

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

Strategic Investment: The investment in this project represents substantial value for money by providing crucial improvements to Catalyst and Cardano DRep system, which is foundational to the funding and development of the Cardano ecosystem. Improved review processes will enhance project selection quality and governance action directly influencing the efficiency and effectiveness of resource allocation within the Cardano community.

Expertise and Complexity: Costs reflect fair compensation for specialized skills in data analysis and software development. The budget allocations align with prevailing rates in the industry, determined by the experience and skill set of our professionals.

Risk mitigation: As a team, we willingly accept the currency risk of being paid in ADA, demonstrating our commitment and adaptability in a dynamic cryptocurrency environment. A decrease in the ADA price is a risk we bear, while any increase allows us to expand the scope.