How SundaeSwap’s Community Management Plans Can Benefit Cardano

Cardano’s own decentralized cryptocurrency exchange (DEX) SundaeSwap has not had an easy start, with several hardships in its path from the start. However, the DEX continues to move forward as it has now set the path to becoming a fully decentralized platform through community management. This, days after the Initial Stake Pool offering wreaked havoc on the decentralization of Cardano’s native token, ADA.

In a blog post earlier on Feb. 28, the exchange highlighted plans to transfer management of the protocol to the community, while noting the importance of this structure to full decentralization. It noted,

“Community guidance through smart contract-driven voting and governance is a core step in creating an ownerless marketplace that enables direct, trusted engagement between community members.”

However, it revealed that the full community governance plan could still be a long way off, due to Cardano’s current transaction size parameters. This is because the management capabilities in the smart contracts of the SundaeSwap protocol require transactions larger than 16 kb, which are not currently available on the network. However, the exchange noted that it is hopeful that once the Babbage HFC upgrades are implemented by IOG later in 2022, full smart contract-driven governance can be implemented.

In the meantime, however, a board category called “Sundae DAO” has been created in the SundaeSwap Discord by the development team to discuss board proposals and temperature checks on possible future proposals, the blog post said. In addition, a SundaeSwap Board discourse forum board for voting proposals, board temperature checks and general DAO discussions are also created by the developers.

This will provide an initial mechanism for full DAO independence and will mainly be used for voting on community proposals for light protocol proposals. However, proposals with significant changes to protocol parameters will have to go through the formal SundaeSwap Governance interface.

It should be noted that SundaeSwap’s previous experience with community voting had proved disastrous as the Initial Stake Pool Offering (ISPO) concentrated billions of ADA in the hands of very few ring pool operators. While it soon implemented a reverse ISPO to mitigate these changes, it became clear that the effects of such centralization could have far-reaching implications for the entire Cardano network.

Nevertheless, SundaeSwap remains Cardano’s supremo as it is the most popular decentralized exchange on the network and more than 98% dominance in terms of the total number of ADA locked into its smart contract. Of Cardano’s $116.07 million DeFi TVL, $114.06 million is locked up in SundaeSwap.

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