🌎 Cardano Completes Chang Upgrade, Shifts to Decentralized Governance

Cardano has successfully completed its Chang upgrade, marking a key shift to a decentralized governance system. This upgrade allows ADA holders to have a significant role in shaping the network’s future.

Named after the Chinese mathematician Ch’ang Shou, the upgrade was finalized at block 10764778 on September 1, 2024. This development introduces several important changes, including decentralizing Cardano’s governance through on-chain voting, introducing Delegate Representatives, enhancing smart contract capabilities with PlutusV3, and implementing a new governance structure and cost model improvements.

Key Changes in Cardano’s Governance

Cardano’s blockchain is transitioning into the “Conway ledger era,” characterized by what the network refers to as “liquid democracy.” This means ADA holders can either vote directly on governance issues or delegate their voting power to trusted representatives, known as Delegate Representatives (dReps).

In addition to dReps, two other user-led governance bodies—the Constitutional Committee and Stake Pool Operators—will oversee and implement governance actions. Previously, this role was held by Cardano’s three founding entities: the Cardano Foundation, Input Output Global, and Emurgo.

Phased Transition

The transition to Cardano’s new governance model will occur in two phases. The first phase, currently underway, involves establishing an Interim Constitutional Committee with limited authority to temporarily oversee governance. This phase focuses on maintaining security and stability while the new governance framework is being developed, allowing dReps to register and build support.

Following this, over a period of 90 days, the network will gradually transition power to the new governance bodies. The second phase, expected to begin in early 2025, will fully empower the dReps, Stake Pool Operators, and the Constitutional Committee to make key decisions, such as voting on proposals and managing the treasury.

Enhancements with Plutus Scripts

The Chang upgrade also enables the use of Plutus scripts for governance, making it possible to support advanced voting methods, such as voting within Decentralized Autonomous Organizations (DAOs).

This recent hard fork is a step towards the Voltaire era, which aims to make Cardano a self-sustaining ecosystem. Initially scheduled for August 30, the upgrade was delayed to allow cryptocurrency exchanges to prepare for the change.

Despite the importance of the upgrade, the price of ADA did not benefit immediately and was down 3.1% over the past 24 hours.