Cardano Hands Over Control of Its $13B Blockchain to ADA Coin Holders in Major Step Toward Decentralized Governance

The Cardano blockchain has taken an immense step toward decentralized governance with the release of the Chang hard fork.

Cardano's blockchain has taken a major step toward decentralized governance with the Chang hard fork. At 10:44 p.m. London time on Sunday, Cardano began shifting control of its $13 billion blockchain to holders of its native ADA coin.

This marks the first stage of the blockchain's transition to a fully decentralized governance architecture, with a second upgrade slated for later this year to complete the process.

Cardano CEO Frederik Gregaard highlighted the significance of this transition, given that the community has "always believed in the promise of decentralization for the network."

"Every ADA holder will now be able to contribute to the ecosystem's evolution," Gregaard added, emphasizing the collaborative and innovative spirit within the community.

The implementation of CIP-1694 introduces a new community governance structure, which includes the formation of three user-led governance bodies: the Constitutional Committee, Delegate Representatives (dReps), and Stake Pool Operators (SPOs).

This change effectively delegates the power to trigger chain upgrades or "hard forks" from Cardano's founding entities—Cardano Foundation, Input Output Global (IOHK), and Emurgo—to the newly formed governing committees.

With the Voltaire-era governance model, Cardano becomes the first major blockchain to integrate a token-based governance system. While this shift is welcomed by many in the community, decentralized governance comes with its own set of challenges.

Critics of similar systems, such as Decentralized Autonomous Organizations (DAOs), argue that they can be plagued by excessive budgets, weak checks and balances, and the dominance of a small group of powerful stakeholders.

Cardano's new governance framework attempts to address these concerns by adopting a tricameral system where DReps, or community representatives, make decisions together with two other legislative bodies.

This structure is designed to ensure that all key stakeholders have a voice in the governance process, thereby maintaining a balance of power across the network.

This move showcases Cardano's commitment to decentralization as it aims to strengthen its role in the ever-expanding blockchain ecosystem.

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