Please describe your proposed solution

<https://youtu.be/dPvfa1A5GO0>The problem we are addressing is the lack of understanding regarding voting power within decentralized governance systems. In voting systems where governance is tied to token holdings ("1 coin, 1 vote"), there is a risk that a small number of large stakeholders can exert outsized influence over decision-making. This can be disguised if a calculation of voting power, which is different than voting weight, is not included. This lack of clarity means that a few entities could have full control over outcomes without the voting constituents realizing it. Centralization diminishes the integrity and fairness of any governance process dependent on decentralization for the establishment of trust and security.

Our goal is to quantify the distribution of voting power in a convenient application, bringing transparency and clarity to governance issues.

We are using the Banzhaf Power Index (BPI) to measure the voting power dynamics in weighted voting systems. BPI has proven its effectiveness in measuring how small groups of voters can disproportionately affect outcomes in various governance contexts. By calculating the BPI for Cardano's voting systems, we can quantitatively assess how centralized the decision-making process potentially is. Furthermore, the approach can be generalized and applied across other blockchain ecosystems, ensuring scalability and relevance to a wide range of decentralized governance systems. We also plan to optimize these calculations for speed and accuracy, providing real-time insights for the community.

Our project will engage multiple stakeholder groups:

• Project Catalyst participants: These include the voters, delegators, and governance actors who want to better understand their voting influence within the system.
• Blockchain, DAO and other governance systems: Our solution is applicable to any "1 coin, 1 vote" ecosystem, where token holdings dictate governance outcomes.
• Data analysis/visualization: DReps involved in governance systems will benefit from an index and methodology for calculating the voting power in the systems they participate, leading to greater knowledge for their representative constituents.

We will prove our impact by:

• Implementing a public dashboard: A front-end tool where blockchain communities can submit their governance data to calculate and visualize their voting power distributions.
• Automatic reports: These reports are automatically generated with a data upload. They will include the visualization of the degree of centralization in a weighted voting system.
• Simulate a variety of scenarios in order to understand how vote distribution impacts voting power distribution.
• Suggest governance upgrades: Our tool will help communities identify the effect of implementing different governance schemes, such as Quadratic Voting.
• We will research the ability to make our index a useful choice in Oracle smart contracts.

Our solution is unique because it provides an objective, mathematical framework for evaluating governance centralization. The Banzhaf Power Index is a well-established tool that brings transparency to how decision-making power is distributed in governance systems. By integrating this solution, we can help the Cardano community ensure that voting power remains decentralized and fair, which is crucial for maintaining trust and legitimacy in a permissionless ecosystem. The broader Cardano community, including smaller token holders and decentralized organizations, will benefit as they gain insights into how their participation can or cannot meaningfully influence governance outcomes. This work is critical for Cardano as it pioneers decentralized governance in the blockchain space, setting a precedent for other systems to follow.

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

Our project will bring value to the Cardano community by enhancing transparency within governance systems AND will help demonstrate that Cardano is the leader in on-chain governance.

The key positive impacts include:

• Improved Governance Transparency: By quantifying the distribution of voting power, the community will have clear insights into whether the system is centralized or decentralized. This empowers smaller stakeholders to make clear requests to their representatives and helps representatives re-allocate their voting power from disproportionately large token holders.
• Enhanced Decision-Making: Understanding the actual voting power dynamics allows the community to implement more equitable governance models, such as Quadratic Voting or other alternative voting schemes, to counter centralization.
• Broader Application: Our solution is scalable and can be applied to other DAOs and PoS governance systems on Cardano and beyond, driving fairer governance across the entire ecosystem.

We will share the results and outputs of our project with the wider Cardano community through several channels:

1. Public Reports: Automatic reports generated when a community uploads voting wallet distribution to measure their voting power. Detailing the state of decentralization and voting power distribution will be published on a dashboard so others can see the ranking of voting power index.
2. Interactive Dashboard: We will create a front-end web interface where users can submit their data and receive real-time BPI analysis.

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?

Wolfram Blockchain Labs and Photrek are uniquely positioned to deliver this project with high levels of trust, transparency, and accountability due to several factors:

1.Established Expertise and Track Record:

• Wolfram has already built the foundational definition, methodology, and prototype implementation of the Banzhaf Power Index calculation, which has been validated through use in the "Sociocratic Pluralism" paper authored by Photrek. The collaboration between Photrek and Project Catalyst showcases a proven capability to develop governance models and share relevant feedback.
• Wolfram has a long-standing reputation for rigorous computational solutions and has demonstrated its ability to manage large-scale projects within Project Catalyst. This background ensures that we can extend the Banzhaf Power Index into a comprehensive and scalable solution for the Cardano ecosystem.

2.Partnerships and Proven Tools:

• Our collaboration with Photrek and ongoing engagement with Project Catalyst provides further credibility. The alternative voting schemes being explored by this team's projects are based on insights generated by our BPI calculations, highlighting the practical relevance and application of our approach.
• In the necessary event of support, we also plan to collaborate with other teams such as Xerberus and ClarityDAO, which can help us detect information regarding sybil attacks (Xerberus) and find/collect DAO related-data (Clarity).
• We are researching the implementation of governance action into Marlowe, which may enhance oracle choices to include governance actions.

We intend to validate our approach in the following ways:

1.Prototype Validation:

• The existing prototype has already demonstrated the ability to calculate the Banzhaf Power Index and provide valuable insights. We will build on this foundation by refining and optimizing the solution, ensuring its scalability for broader use.

2.Quantitative Metrics:

• By running the BPI across Project Catalyst data, we will quantitatively measure centralization versus decentralization in real-time. This real-world application will provide continuous validation of the index's practicality.
• Applying quantitative metrics across a variety of simulated scenarios. The simulations, provided by Photrek, will evaluate how the voting distribution and social network of a community impacts the BPI measured voting power distribution.

3.Pilot Projects:

• We will begin by rolling out the solution to include any blockchain DAO. We will encourage any team to submit their ecosystem's voting distribution so we can track and index a ranking. This step-by-step approach allows us to validate our methods in stages and refine the solution based on feedback.

Wolfram Blockchain Labs' extensive experience, coupled with clear project management processes and strong collaborations, ensures that we have the capacity and accountability to deliver this project successfully, while maintaining the trust and confidence of the Cardano community.

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

Milestone 1: Milestone 1: Banzhaf Power Index (BPI) Optimization

• A: Milestone Outputs:
• Optimize the existing Banzhaf Power Index calculation to improve computational efficiency, particularly for large cohorts of stakeholders.
• Implement indexing and bucketing methods for handling large sets of data, such as Project Catalyst voter data.
• Create a minimum viable threshold parameter for determining centralization vs decentralization
• Research a higher-level measure based on the Generalized Pareto principle to complement the BPI, offering a broader indicator of decentralization within blockchain ecosystems.
• Design simulations that will provide a test for measuring BPI.
• B: Acceptance Criteria:
• The optimized BPI calculation or bucketing method can deliver the important result for any sized voting community
• Completion of documentation outlining the optimized calculation and its performance relative to the original definition.
• Research provided on Generalized Pareto metric
• Completion of design document for simulation.
• C: Evidence of Milestone Completion:
• PDF report or Wolfram notebook showing computational or data bucketing improvements, design document for simulation and information on Generalized Pareto measurement.
• GitHub repository with the optimized definition, available for peer review.

Milestone 2: Milestone 2: Dashboard Development for BPI Analysis

• A: Milestone Outputs:
• Develop a web-based dashboard where communities can upload governance data and automatically receive a one page report.
• Integrate data visualization tools for displaying cohort analysis, BPI score, and visual comparison of the regular vs quadratic voting outcome.
• Complete analysis of BPI across a variety of simulated scenarios.
• B: Acceptance Criteria:
• The dashboard is functional and accessible, with the ability to ingest CSV files of governance data and produce BPI results.
• Visualizations displayed on dashboard related to cohort analysis, BPI score, and visual comparison of the regular vs quadratic voting outcome.
• C: Evidence of Milestone Completion:
• Video demo of the dashboard showing how it ingests data and produces BPI analysis.
• Report on BPI across a variety of simulated scenarios.

Milestone 3: Milestone 3: Voting Power Distribution Reports

• A: Milestone Outputs:
• Create a one page visual report template for showing the voting power of a voter distribution data.
• B: Acceptance Criteria:
• The report template includes cohort analysis, BPI score, and visual comparison of the regular vs quadratic voting outcome.
• C: Evidence of Milestone Completion:
• PDF version of the report available via WBL website

Milestone 4: Milestone 4: Research Alternative Voting Schemes &amp; Simulations

• A: Milestone Outputs:
• Implement simulations for alternative voting schemes such as Quadratic Voting and compare their impact on governance centralization using the BPI.
• Provide a comparative report showing how Quadratic Voting or other schemes affect the power distribution within Project Catalyst.
• B: Acceptance Criteria:
• A working simulation report for alternative voting schemes.
• A report that includes side-by-side analysis of governance outcomes under traditional and alternative voting systems, using BPI as the core metric.
• C: Evidence of Milestone Completion:
• Comparison PDF report on the governance outcomes of different voting schemes.
• Video demo the simulation process and its results.

Milestone 5: Milestone 5: Production, Testing, and Documentation

• A: Milestone Outputs:
• Complete the development and production testing of visualizations, calculations, dashboard and reports with documentation.
• B: Acceptance Criteria:
• Complete the development and production testing with documentation.
• C: Evidence of Milestone Completion:
• Final report in PDF of calculation and methodology and a GitHub repository with the optimized definition, available for peer review.

Final Milestone: Final Milestone: Project Close-Out, Final Report, and Video Presentation

• A: Milestone Outputs:
• Create a video presentation that walks through the project's goals, achievements, and impact on governance decentralization, highlighting key findings and lessons learned.
• B: Acceptance Criteria:
• The final report includes a detailed overview of all milestones, performance metrics, and key outcomes.
• C: Evidence of Milestone Completion:
• Final report in PDF
• Video walkthrough of final report.

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

Jon Woodard, CEO

Jon Woodard is the CEO at Wolfram Blockchain Labs, where Jon coordinates the decentralized projects that connect the Wolfram Technology ecosystem to different DLT ecosystems. Previously at Wolfram Research Jon worked on projects at the direction of Wolfram Research CEO Stephen Wolfram and prior to that was a member of the team who worked on the monetization strategies and execution for Wolfram|Alpha. Jon has a background in economics and computational neuroscience. He enjoys cycling in his spare time.

Johan Veerman, CTO

Johan Veerman is General Manager at Wolfram Research South America and CTO at Wolfram Blockchain Labs. Previously he has been Science Advisor at the Ministry of Foreign Affairs in Peru and Chief Scientist on two Antarctic expeditions. Johan's background is on physics and business management. He enjoys playing soccer and is a certified cave diver.

Steph Macurdy, Head of Research and Education

Steph Macurdy has a background in economics, with a focus on complex systems. He attended the Real World Risk Institute in 2019, lead by Nassim Taleb, and has been investing in the crypto asset space since 2015. He previously worked for Tesla as an energy advisor and Cambridge Associates as an investment analyst. Steph is a youth soccer coach in the Philadelphia area and is interested in permaculture.

Gabriela Guerra Galan, Project Manager

Gabriela Guerra Galan: Gabriela has 15+ years of experience leading projects. She is a certified PMP and Product Owner with bachelor's degree in Mechatronical Engineering, complemented by a master's degree in Automotive Engineering. As the co-founder of Bloinx, a startup that secured funding from the UNICEF Innovation Fund, she has demonstrated a passion for driving innovation and social impact.

Daniel Suarez, Manager - Blockchain Integrations

Daniel Suarez: Daniel is a Manager at Wolfram Research. He is in charge of the software architecture as manager of the blockchain project, and has been with the company for seven years. Daniel has a background in electronic engineering, focusing on Digital Signal Processing and Parallel Computing. Previously, he has experience as a radar software engineer at Jicamarca Radio Observatory. He enjoys playing drums.

Piero Sanchez, Lead Developer

Piero Sanchez: Piero is Lead Developer of Blockchain Integrations at Wolfram Blockchain Labs/Wolfram Research South America. Piero has been with the company for five years, and he is in charge of integrating and maintaining new blockchain technologies with the Wolfram Language, as well as helping other team members with technical tasks. He has a background in experimental physics and quantum optics and has worked in the blockchain group since it started. In his free time, he likes to play video games and board games.

Anshu Manik, Wolfram Technical Consulting

Anshu Manik is a seasoned professional specializing in AI/ML software development, with a Ph.D. in Civil Engineering from UIUC. With over 14 years of experience at Wolfram Research, Anshu has honed their expertise in developing cutting-edge solutions using Data Science, AI/ML, process automation, and natural language processing. Anshu's innovative approach and deep knowledge of advanced technologies enable them to create impactful solutions for clients worldwide.

Kenric Nelson, Photrek

Kenric Nelson is the Founder and President of Photrek, LLC which is developing novel approaches to Complex Decision Systems, including risk-aware machine intelligence, particularly for environmental risks, and governance policies for decentralized communities. He served on the Cardano Catalyst Circle governance council and is leading a revitalization of Sociocracy for All’s <member communityid="163" id="90982">work</member> circle. Prior to launching Photrek, Nelson was a Research Professor with Boston University Electrical &amp; Computer Engineering (2014-2019) and Sr. Principal Systems Engineer with Raytheon Company (2007-2019). He has pioneered novel information metrics that are improving the training of machine learning alogrithms. His education in electrical engineering includes a B.S. degree Summa Cum Laude from Tulane University, a M.S. degree from Rensselaer Polytechnic Institute, and a Ph.D. degree from Boston University. His management education includes an Executive Certificate from MIT Sloan and participation in NSF’s I-Corp program.

Please provide a cost breakdown of the proposed work and resources

Total cost: 487,900 ADA

Milestone 1: Banzhaf Power Index (BPI) Optimization: 149,000 ADA

• Optimize the existing Banzhaf Power Index calculation
• Implement indexing and bucketing methods for handling large sets of data
• Create a minimum viable threshold parameter for determining centralization vs decentralization
• Research a higher-level measure based on the Generalized Pareto principle
• Design simulations that will provide a test for measuring BPI.

Milestone 2: Dashboard Development for BPI Analysis: 96,000 ADA

• Develop a web-based dashboard and automatically generate a one page report.
• Display cohort analysis, BPI score, and visual comparison of the regular vs quadratic voting outcome.
• Complete analysis of BPI across a variety of simulated scenarios.

Milestone 3: Voting Power Distribution Reports: 40,600 ADA

• Create a one page visual report template for showing the voting power of a voter distribution data.
• Display cohort analysis, BPI score, and visual comparison of the regular vs quadratic voting outcome.

Milestone 4: Research Alternative Voting Schemes &amp; Simulations: 85,500 ADA

• Implement simulations for alternative voting schemes and compare their impact
• Show how Quadratic Voting schemes affect the power distribution within Project Catalyst.

Milestone 5: Production, Testing, and Documentation: 116,800 ADA

• Complete backend development
• Complete production testing
• Complete UI/UX
• Complete documentation

Final Milestone: Project Close-Out, Final Report, and Video Presentation

No dependencies

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

The cost of this project offers significant value for the Cardano ecosystem due to the critical role it plays in improving decentralized governance. Ensuring fair and transparent governance is essential to maintaining the trust and engagement of all stakeholders, especially in systems like Project Catalyst, where voting power can become concentrated among large token holders. The Banzhaf Power Index (BPI) will provide precise insights into voting power distribution, allowing the community to monitor and prevent centralization risks.

Wolfram Blockchain Labs, in collaboration with Photrek, brings expertise and proven methodologies to this project, ensuring the delivery of optimized solutions. The costs reflect the specialized nature of the work, including the development of simulations for alternative voting schemes like Quadratic Voting, and the creation of an open-source dashboard for the community. This project represents a one-time investment in building critical tools that will remain open-source, benefiting not just Cardano, but the broader blockchain ecosystem.