Cardano recently marked a significant milestone with the initiation of its first step for the “Voltaire” era with the Chang Hard Fork Upgrade that went live on September 1, 2024.
This upgrade is a highly-anticipated move that will finally bring in the final pieces of the decentralization puzzle for the Cardano project. In case you missed it, here is our deep dive on this token.
But is Cardano (ADA) a buy? The token is down 46% YTD and trading at October 2023 levels. To better understand what’s going on, let’s first recap what Cardano is and what the Chang Hard Fork entails.
Cardano Origins
Launched in 2017 by Input Output Hong Kong (IOHK), Cardano is a third-generation layer 1 blockchain system that utilizes the Ouroboros proof-of-stake protocol, and an extended UTXO model for smart contracts. Charles Hoskinson was a co-founder of Ethereum before branching out to start Cardano. It prides itself on being the first blockchain that was based on scientific-backed research that have been accepted at major cryptographic conferences.
As a recap, Cardano has previously went through four stages of previous hard forks; “Byron” established the foundation, “Shelley” introduced early stages of decentralization, “Goguen” added smart contract compatibility, and “Basho” enabled better scaling.
“Voltaire” is the final step of the current roadmap, with a focus on governance. The Hard Fork codename “Chang” is a tribute to the late Phil Chang of Input | Output, who made significant contributions to Cardano’s governance and plans for Voltaire.
Cardano emphasizes community involvement with various types of individuals: ADA holders, stake pool operators, developers, and more. Community-based interaction includes allowing stakeholders to vote on changes and fund projects, in this case through the Project Catalyst Proposals if one is an ADA holder.
Cardano’s Voltaire Stage
However, older Shelley governance designs have had their downsides, such as being unable to provide room for active on-chain participation of ADA holders, as explained here. Ultimately, while implemented changes to the Cardano chain have been influenced by discussions with selected community participants, the process has been mainly executed by founding entities.
This upgrade will be split into two stages; The initiation of the Conway Era, aka Chang 1, is the first. Cardano calls this the “bootstrapping” stage, and releases the initial setup of decentralized governance features of CIP-1694. The Interim Constitutional Committee, or ICC, was introduced with on-chain veto voting power. Individuals will register to be delegate representatives (dReps) and campaign to be elected, and ADA holders will delegate their voting power to them.
The second stage, aka Chang 2, is to occur approximately 18 epochs (90 days) after the first stage, with estimates of possibly in early 2025. With the help of Intersect, a member-based organization for the Cardano ecosystem, they will oversee and facilitate self-governing initiatives for the ecosystem; all entities mentioned above can then vote on governance actions in this stage, with results concluding with treasury withdrawals.
Implications for Cardano Developers & Users
The next stage of decentralization for Cardano has arrived, with the Genesis Keys (cryptographic keys crucial in early stages of blockchain development) destroyed and original governing entities no longer in control; this upgrade introduces a new era of on-chain governance, enabling ADA token holders to directly influence network decisions.
What makes this “Chang” Hard Fork different, is that it provides a new governance model and introduces PlutusV3, which is a new ledger language with better performance, throughput, smart contract size, and platform capabilities for developers.
But perhaps most importantly, this new structure has the original founding entities relinquishing their power, and a new era is being ushered in, with any Cardano user being allowed to submit a proposal for governance action.
“This will mark the first step towards a minimum-viable community-run governance structure outlined in CIP-1694, meaning that the Cardano community will be responsible for maintaining and shaping the blockchain network”, explained Emurgo earlier in July.
Now, three user-driven governance bodies; Constitutional Committee, Delegate Representatives (dReps), and Stake Pool Operators (SPOs) will take charge of the decentralized ecosystem. In short, everyone can now be involved, with power in the hands of the many.
Furthermore, the Chang Hard Fork upgrade includes technical enhancements aimed at boosting scalability, stability, and security. Stake pool operations will be improved with better management refined fee calculations. New primitives via Plutus3 will be introduced, which helps with ZKproofs, improved compatibility with the Ethereum chain, and more.
Is Cardano (ADA) a Buy?
As ADA is currently down 46% YTD and trading at October 2023 levels, this could be a good opportunity to buy in for the long haul.
Hours after the Chang Hard Fork initiation on September 1st, ADA rose by 2.45%, and surged 3.23% from its weekly low on September 2nd. This analyst predicts a rally soon, based on a historical comparison of technical patterns, with another drawing comparisons with Solana trends.
Quick Recap:
- Major Upgrade: The Chang Hard Fork, launched on September 1, 2024, marks the beginning of Cardano’s “Voltaire” era, bringing significant changes to the blockchain network.
- Decentralized Governance: The upgrade transitions Cardano from a centralized system to a decentralized one. ADA token holders can now vote on proposals and elect Delegate Representatives (dReps), enhancing transparency and community involvement.
- Technical Improvements: The Chang Hard Fork includes enhancements aimed at improving scalability, stability, and security.
- Industry Impact: This upgrade could set new standards for blockchain governance, potentially inspiring other projects to adopt similar decentralized models or learn from Cardano’s approach.
- Time to Buy: With Cardano’s ADA token down 46% YTD and trading at October 2023 levels, now could be a good time to buy.
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