Cardano is a blockchain, open source, which allows for smart contracts and issues its own token called ADAThis cryptocurrency is one of the most important on the market and has been included in the US cryptocurrency reserves since March 2, 2024, by order of President Donald Trump.
Unlike Bitcoin (which uses a proof-of-work protocol), Cardano has a proof-of-stake technologycalled Ouroboros. This one has its own blockchain, called Cardano Settlement Layer (CSL). However, what is most striking is that it manages its mining, sales and protocols through a general vote of token holders.
This is how there is a Cardano community, made up of holders of this cryptocurrencyThis is an inclusive, highly original approach that has made progress in 2025 in developing the open-source blockchain network. This avoids surprises for cryptocurrency users and strengthens trust in the Cardano project.
BUY BITCOINThe CIP-1694 system implemented by Cardano
The CIP-1694 system is a governance model that involves the participation of ADA holders. What does this mean? Well, a holder is someone who holds cryptocurrency for a long time, without exchanging it. Therefore, the Cardano system allows those who hold the cryptocurrency for long periods of time to vote on decisions regarding the development of the system, the blockchain and token management.
This model combines “financial technology” with traditional management strategies and is supported by three governance bodies:
- Constitutional Committee: is a group whose mission is to ensure that decisions are in line with Cardano's values.
- Delegated Representatives: are users of the ADA currency. This is where some holders elected by the community participate.
- Pool Operators: are representatives of technical groups who provide opinions on how to validate blocks, as well as advise governance on IT issues.
These three bodies put forward proposals, which are always put to a vote and are called "governance actions”. This is how each proposal is evaluated before being implemented, always taking into account the Cardano community consensus.
BUY ETHEREUMThe importance of Delegated Representatives
As we mentioned before, the Delegated Representatives — known as DReps — are made up of ADA holders. Here's the key to voting: ADA Representatives are those who cast the vote for decision-making. That is, it is a indirect voting system: The owners elect representatives, who are in governance.
How are these Delegated Representatives chosen? There are two ways. The first is through the community of ADA token holders. They vote for someone they consider more informed and whom they trust.. But, each user can also become a representative of oneself, through a refundable deposit of 500 ADAIn fact, all representatives must make deposits, in addition to owning the cryptocurrency for a long time.
The novelty is the interesting Cardano Constitution
Nothing can work without agreed-upon rules! Therefore, a key element in this protocol is the new Cardano ConstitutionThis document was approved at two conventions held in the cities of Buenos Aires y Nairobi. Such conventions brought together representatives and members of Cardano's governance bodies, resulting in a Constitution for the community of this blockchain.
This constitution provides the Basic rules for the operation of Cardano and the use of its ADA tokenThe items detailed in this constitution include: protections regarding the decentralization of the system, responsible use of tokens and treasury, as well as all procedures for approving modifications to the Cardano network.
Thanks to Cardano, a new blockchain and crypto management model which is inclusive and participatory. The Holders of virtual currencies act as shareholders of a company, since they own a percentage or fraction of the total value of cryptocurrencies. For this reason, they are considered to have a say in Cardano's development.
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A model that aims for decentralization and community governance
It's a true evolution in the cryptocurrency ecosystem. The Bitcoin and Ethereum blockchains are independent of users. Cardano, on the other hand, is detached from this way of working, as the Network users are consulted for each change, in decisions such as those of Burning tokens, stopping mining, modifying transaction protocols, etc.The network and the total value of ADA tokens are owned by the entire community, which decides how its digital assets are managed.
On the other hand, it is necessary to know that to participate in the "governing body" it is required to download an application called: Catalist VotingThis application allows you to vote in a wallet, Yoroi or in EternlIt's important to note that this vote can never be made from an exchange and is held on a specific date, agreed upon by the Governing Body.
What are the advantages of the CIP-1694 system?
There are several, but the main one is trust. Cardano users know they are being consulted, who are considered for any action and form part of a community that ensures the consensual management of the ADA token. The issue of trust is central to cryptocurrencies, as there is always reluctance to face the volatility of digital currencies. This trust factor is what has allowed Cardano to become part of the United States' currency reserves. In fact, more than a crypto reservoir, the US government adopted to a community among its cryptocurrency reserves, which allows for greater stability, as members are always monitoring that the token does not devalue.
