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Cardano (ADA), the layer-1 blockchain, has officially launched its Chang hard fork. This milestone marks a remarkable shift toward decentralized governance.
Late Sunday, the governance of the $13 billion blockchain began transitioning to its ADA token holders. The Cardano community had long anticipated this change.
First Phase of Cardano Chang Hard Fork
With the Chang upgrade now active, ADA holders gain the ability to elect governance representatives and vote on crucial development proposals.
“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,” the Cardano Foundation announced.
Read more: Who Is Charles Hoskinson, the Founder of Cardano?
Outlined in Cardano Improvement Proposal CIP-1694, the Chang hard fork introduces a new governance structure featuring three user-led bodies:
- The Constitutional Committee,
- Delegate Representatives (dReps), and
- Stake Pool Operators (SPOs).
Previously, the power to initiate upgrades or hard forks resided with Cardano’s three founding entities—the Cardano Foundation, Input Output Global (IOHK), and Emurgo. Now, this responsibility shifts to the newly established governance groups. On August 30, Charles Hoskinson, the co-founder of Cardano, emphasized the finality of this shift, declaring the “Genesis keys are dead.”
Cardano’s Chang hard fork will have a two-phase implementation. The first, which is already live, features an Interim Constitutional Committee.
This committee will temporarily oversee governance, ensuring a smooth transition as the rest of the governance model is implemented. Consequently, the new governance bodies are expected to be fully empowered in 90 days.
This initiative marks Cardano as one of the first major blockchains to implement a token-based governance system, heralding what is known as the era of Voltaire. This name references the French Enlightenment writer who was a staunch advocate of free speech.
Challenges With the Decentralized Governance Model
However, while many Cardano fans celebrate this move, decentralization presents its challenges. Governance bodies such as the decentralized autonomous organizations (DAOs) have faced criticism for issues such as bloated budgets and lack of adequate checks and balances. Critics also point out that power often ends up concentrated in the hands of a few.
On the other hand, the new governance model might make it challenging for regulatory bodies such as the US Securities and Exchange Commission (SEC) to label Cardano a security.
“If the SEC wants to send a subpoena to someone from Cardano, they will have to address it to all ADA holders around the world. The 3 founding entities technically no longer have any converol over Cardano,” a community account, Cardanians, noted.
Despite the hard fork, ADA’s market response was underwhelming, with a decrease of 3.72%. As of writing, ADA is changing hands at $0.331192.
Read more: Cardano (ADA) Price Prediction 2024/2025/2030
Once ranked among the top three cryptocurrencies (excluding stablecoins), ADA has slipped from the top ten by market capitalization. Other blockchains like Tron and Toncoin have flipped Cardano’s market capitalization.
Moreover, ADA remains down 89% from its all-time high of $3.09, recorded three years ago on this date.