TLDR:
- Cardano successfully implemented the Chang hard fork on September 1, 2024
- The upgrade marks the beginning of decentralized governance for Cardano
- ADA token holders can now participate in voting on governance actions
- The transition will be completed with a second upgrade later in the year
- Cardano aims to avoid issues faced by DAOs through a tricameral governance model
Cardano, the blockchain platform founded by Ethereum co-founder Charles Hoskinson, has taken a step towards decentralization with the successful implementation of its Chang hard fork on September 1, 2024.
This upgrade marks the beginning of a new era for Cardano, dubbed the “Voltaire era,” which aims to transfer control of the $13 billion blockchain to holders of its native ADA token.
Today’s Chang hard fork marks a major milestone for the Cardano blockchain, ecosystem, and community––fulfilling the promise of a truly self-governing, decentralized network.
Welcome to a new era of decentralized governance: Voltaire. ⚖️ https://t.co/sE0iyRKLg9 pic.twitter.com/dA0JkgYOio
— Cardano Foundation (@Cardano_CF) September 2, 2024
The Chang hard fork, which went live at 21:44 UTC at block 10764778, introduces on-chain participatory governance to the Cardano ecosystem.
This upgrade allows any ADA token holder to submit or participate in the voting process for governance actions, fulfilling Cardano’s long-standing promise of a decentralized governance model.
Frederik Gregaard, CEO of the Cardano Foundation, emphasized the importance of this transition, stating,
“Every ADA holder can contribute to the ecosystem’s evolution. The community will collaborate, innovate, and govern by mutual agreement.”
This move makes Cardano the first major blockchain to implement a token-based governance system on this scale.
The new governance structure introduces several key components, including delegate representatives (DReps), a constitutional committee, and a new governance role for stake pool operators.
These elements will be phased in over the next 90 days, with a second upgrade later in the year set to complete the transition.
Cardano’s approach to decentralized governance aims to address criticisms faced by Decentralized Autonomous Organizations (DAOs), which have been challenged by issues such as excessive budgets and inadequate checks and balances.
The blockchain’s new system will employ a tricameral model, ensuring that all important stakeholders have a voice while maintaining necessary checks and balances.
Proponents of the upgrade argue that decentralization will make Cardano more attractive to institutions looking to engage with decentralized finance (DeFi). Florian Volery, co-founder of Liqwid Labs, noted,
“Without a central authority controlling the network, it is much harder for governments or corporations to censor information or transactions.”
The transition to decentralized governance is not without challenges. Cardano will need to navigate the complexities of involving thousands of ADA token holders in the governance process, many of whom may not fully understand the new system.
The blockchain also continues to face technical challenges, including the Unspent Transaction Output (UTXO) problem, which can cause transaction failures in certain DeFi protocols.
Despite these challenges, the Cardano community remains optimistic about the upgrade’s potential. Charles Hoskinson, in a video statement, reflected on the ecosystem’s growth, saying,
“Now we are here today…a day where the entire ecosystem, the community, every holder of ADA stands shoulder to shoulder as equals and they all have a say in the future not just of this protocol, but what this protocol can do for everyone in the world.”
