<p>The current voting process is anonymous. It will be impossible to prevent any major ADA holders from influencing voting to favor a particular project proposal and take money from Treasury. However, robust safeguards are in place. These are as follows:-</p>
<ul>
<li>The proposal goes through an open assessment process. Most probably, a
pure money-draining proposal will get highlighted and will be assigned a lower rating.</li>
<li>Voting security has features very similar to the proof of stake therefore even for a major exchange, and it will be almost impossible to push through a wrong project.</li>
<li>Most importantly, Catalyst projects are the ones that are going to add value to
Cardano. Therefore any major holder of Cardano will not be
undermining Project Catalyst since it is only going to hurt his
interest.</li>
</ul>
<p>Like all features of Cardano, the catalyst process seems to be designed following &quot;game theory&quot;. It is designed so that unless one is in self-harming mode and holds more than 50% of ADA in circulation, a successful proposal is not likely to be a pure scam. Will they be able to influence the outcome? Yes, they can and should in a positive way for their own good.</p>

CC BY-SA 4.0
2021-05-05T09:59:22.273Z
2021-05-05T09:59:22.273Z
raghu
<p>Not at the moment, as the fund rounds are still small.</p>
<p>But in the very near future, in order to vote in Catalyst, you would have to freeze your funds for the period of voting. This will prevent larger regulated entities such as binance, eToro or Kraken to participate, as it is against their regulation to prevent customer's liquidity.</p>

CC BY-SA 4.0
2021-05-05T16:01:32.340Z
Wouldn’t that reduce Ada’s liquidity too much? Meaning regular users would have less incentive to vote on proposals?
LaX
CC BY-SA 4.0
2021-05-05T18:08:52.513Z
Any references to where this has been stated?
gRebel
CC BY-SA 4.0
2021-05-06T19:49:21.930Z
Yes, for example here: https://www.youtube.com/watch?v=GJANeEkj408&t=1495s
Marek Mahut - StakeNuts
CC BY-SA 4.0
2021-05-05T15:59:42.113Z
2021-05-05T15:59:42.113Z
Marek Mahut - StakeNuts
<p>I found another answer in <a href="https://medium.com/@undersearcher/how-secure-is-cardano-5f1e076be968" rel="nofollow noreferrer">this article about Cardano</a> (from 2019).
This paragraph in particular:</p>
<blockquote>
<p>In Cardano, exchanges will get special enterprise exchange addresses that cannot participate in network consensus and governance. Although there is no technical way to enforce exchanges to use these, social pressure by the exchanges’ customers could push them to do so.</p>
</blockquote>

CC BY-SA 4.0
2021-05-21T22:32:59.453Z
2021-05-21T22:32:59.453Z
LaX
<p>Kraken <a href="https://blog.kraken.com/post/8891/earn-4-6-staking-cardano-ada-available-on-kraken-now/" rel="noreferrer">recently announced</a> it would let its users stake Ada on their account.</p>
<p>However, since Kraken owns this ADA, I understand this means it could have the voting power of all its users combined on platforms like Project Catalyst.</p>
<p>Are there safeguards that would prevent one party from accumulating too much voting power? Or is this a non-issue altogether?</p>

<catalyst><staking><security>
Are there safeguards preventing big centralised exchanges like Binance and Kraken from having too much power in projects like Catalyst?
# Are there safeguards preventing big centralised exchanges like Binance and Kraken from having too much power in projects like Catalyst?

(Asked by: username_0 on 2021-05-05)

Kraken [recently announced](https://blog.kraken.com/post/8891/earn-4-6-staking-cardano-ada-available-on-kraken-now/) it would let its users stake Ada on their account.

However, since Kraken owns this ADA, I understand this means it could have the voting power of all its users combined on platforms like Project Catalyst.

Are there safeguards that would prevent one party from accumulating too much voting power? Or is this a non-issue altogether?

**Tags:** catalyst, staking, security

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## 3 answers

### Answer by username_1 on 2021-05-05. Score: 15

The current voting process is anonymous. It will be impossible to prevent any major ADA holders from influencing voting to favor a particular project proposal and take money from Treasury. However, robust safeguards are in place. These are as follows:-

* The proposal goes through an open assessment process. Most probably, a
  pure money-draining proposal will get highlighted and will be assigned a lower rating.
* Voting security has features very similar to the proof of stake therefore even for a major exchange, and it will be almost impossible to push through a wrong project.
* Most importantly, Catalyst projects are the ones that are going to add value to
  Cardano. Therefore any major holder of Cardano will not be
  undermining Project Catalyst since it is only going to hurt his
  interest.

Like all features of Cardano, the catalyst process seems to be designed following "game theory". It is designed so that unless one is in self-harming mode and holds more than 50% of ADA in circulation, a successful proposal is not likely to be a pure scam. Will they be able to influence the outcome? Yes, they can and should in a positive way for their own good.


---

### Answer by username_2 on 2021-05-05. Score: 3

Not at the moment, as the fund rounds are still small.

But in the very near future, in order to vote in Catalyst, you would have to freeze your funds for the period of voting. This will prevent larger regulated entities such as binance, eToro or Kraken to participate, as it is against their regulation to prevent customer's liquidity.

> **Comments:**
> **username_0**: Wouldn’t that reduce Ada’s liquidity too much? Meaning regular users would have less incentive to vote on proposals?  
> **username_3**: Any references to where this has been stated?  
> **username_2**: Yes, for example here: https://www.youtube.com/watch?v=GJANeEkj408&t=1495s  

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### Answer by username_0 on 2021-05-21. Score: 2

I found another answer in [this article about Cardano](https://medium.com/@undersearcher/how-secure-is-cardano-5f1e076be968) (from 2019).
This paragraph in particular:

> In Cardano, exchanges will get special enterprise exchange addresses that cannot participate in network consensus and governance. Although there is no technical way to enforce exchanges to use these, social pressure by the exchanges’ customers could push them to do so.


---

