Cardano has successfully executed the Chang hard fork, ushering in the anticipated Conway era. This pivotal advancement marks a substantial step towards achieving complete decentralization. The notable update includes the implementation of the CIP-1694 governance model, which empowers ADA holders to vote on network decisions actively. According to a statement on the network’s blog, this transition “realizes the vision of a fully autonomous and decentralized network.”
Changes in Governance and Reward System
Despite the successful implementation, ADA holders have expressed concerns regarding alterations in governance and the reward system. Charles Hoskinson, founder of Cardano, addressed these concerns, providing clarity on the emerging issues.
Linda, a stake pool operator of MALU Pool, highlighted these worries on social media, suggesting that future staking reward withdrawals would likely require delegating to a DRep. This prediction has sparked significant discussions within the Cardano community about the implications for staking rewards.
Hoskinson’s Explanations
Responding to Linda, Hoskinson explained that ADA holders must choose from three options to withdraw staking rewards: not voting, abstaining, or delegating to a DRep. He clarified that wallets like Lace would automatically select abstaining to streamline the user experience.
Additionally, Hoskinson emphasized that abstaining is an active choice, not to be confused with doing nothing. This clarification was aimed at dispelling confusion among ADA holders regarding the new governance system.
What Are the Key Takeaways?
The new governance system has raised several valid concerns and considerations among ADA holders:
- ADA holders must actively participate in governance to withdraw staking rewards.
- The introduction of DReps may alter the dynamics of staking rewards and governance.
- Clear communication and understanding of the governance options are crucial for community participation.
- The role of wallets like Lace in simplifying the user experience is a significant development.
Concerns in the New Governance System
Post-Chang hard fork, there are increasing concerns about the potential misuse or mismanagement of DReps’ roles in the new governance system. One user expressed apprehension about DReps, fearing they could deplete the treasury. Hoskinson reassured users that the system offers flexibility, including the option to vote no confidence.
Hoskinson emphasized that the new governance framework allows ADA holders to voice their opinions effectively. ADA holders now have the opportunity to vote or delegate their governance responsibilities to DReps, while Stake Pool Operators continue to play a vital role in maintaining the network’s infrastructure.
As of now, ADA is trading at $0.3253, reflecting a 1.63% decline over the past 24 hours.