Cardano recently completed the Chang upgrade, moving towards a decentralized governance system that allows ADA holders to have a significant influence on the network’s future direction. This upgrade, named after Chinese mathematician Ch’ang Shou, was finalized at block 10764778 on September 1. The introduction of on-chain voting, Delegate Representatives, enhancements to smart contract capabilities with PlutusV3, and a new governance structure are some of the key changes brought about by this upgrade.
Cardano is now entering what they refer to as the “Conway ledger era,” based on the concept of “liquid democracy.” This era gives ADA holders the choice to either vote directly on governance matters or delegate their voting power to trusted representatives known as Delegate Representatives. In addition to dReps, two other user-led governance bodies, the Constitutional Committee, and Stake Pool Operators, will play crucial roles in overseeing and implementing governance actions.
The transition to Cardano’s updated governance model will occur in two phases. The first phase involves the establishment of an Interim Constitutional Committee with limited authority to oversee governance temporarily, ensuring security and stability during the development of the new framework. Following this phase, over a 90-day period, power will gradually shift to the new governance bodies. The second phase, expected to commence in early 2025, will empower dReps, Stake Pool Operators, and the Constitutional Committee to make important decisions such as voting on proposals and managing the treasury.
The Chang upgrade also enables the use of Plutus scripts for governance, allowing support for advanced voting methods like those within Decentralized Autonomous Organizations. This upgrade is a stepping stone towards the Voltaire era, where Cardano aims to become a self-sustaining ecosystem. While the upgrade was initially scheduled for August 30, it was postponed to accommodate cryptocurrency exchanges’ preparation for the change. Binance was among the first exchanges to announce support for the fork, signaling broader industry adoption of Cardano’s new governance system.
Despite high anticipation for the upgrade, the price of ADA did not experience a significant increase and was down 3.1% over the past 24 hours following the completion of the Chang upgrade. This market response indicates that while the technological advancements and governance changes are crucial for Cardano’s future development, market sentiment and investor behavior can also influence price movements in the short term.