Cardano is on the brink of a significant transformation with the upcoming Chang hard fork, which will usher in the Voltaire era and introduce on-chain governance. This upgrade marks a crucial step towards achieving full decentralization within the Cardano blockchain ecosystem.
Cardano’s development is structured into distinct phases, also known as eras, each named after influential individuals in various fields. These eras serve as markers for the introduction of new features and upgrades through hard forks. The Byron era laid the groundwork for Cardano by enabling ADA transactions, while the subsequent Shelley era focused on decentralization through community-driven block production. The Goguen era introduced smart contracts and decentralized applications, followed by the Basho era, which aimed to enhance scalability and interoperability. Now, the upcoming Voltaire era will focus on decentralized governance, bringing new capabilities to the Cardano platform.
The Chang Hard Fork
The Chang hard fork, a sub-era of the Voltaire era, will empower ADA holders to participate directly in decision-making through protocol changes and governance actions. This upgrade will introduce the concept of DReps (Designated Representatives), allowing users to delegate their voting power to trusted individuals. In addition to governance enhancements, Chang will bring improvements to Cardano’s smart contract platform with the introduction of PlutusV3.
PlutusV3 Features
PlutusV3 includes new cryptographic primitives such as BLS12-381 and Keccak-256, which enhance security and efficiency for operations like zero-knowledge proofs and digital signatures. The addition of bitwise primitives will offer developers tools for optimizing data manipulation within smart contracts, leading to faster execution and lower costs for decentralized applications. These improvements will enable developers to build more sophisticated and efficient DApps on the Cardano platform.
The Chang upgrade will refine how transaction fees are calculated for DApps by adjusting protocol parameters related to reference scripts. Reference scripts play a crucial role in reducing transaction size, thereby decreasing costs for users and enhancing the network’s capacity to handle more transactions concurrently. Node operators, especially stake pool operators, must upgrade to version 9.1 to support the new governance mechanisms and smart contract improvements.
To ensure a smooth transition with the Chang hard fork, 70% of the network’s stake pool operators need to upgrade their nodes to version 9.1. The rollout of the new version began on July 25, and within just 12 days, over one-third of the network has already adopted it. As of August 5, approximately 63.7% of operators are on version 8.0, 1.3% are still using version 9.0, and around 35% have upgraded to version 9.1.
Historically, major Cardano upgrades have been associated with a pattern of price downturns for ADA, with the exception of the Allegra upgrade, which saw a significant price increase of 133%. However, excluding the Allegra hard fork from the dataset reveals an average price decline of -14.74% following upgrades. Given the current market conditions, it is uncertain how ADA will perform post the Chang hard fork, but if historical trends hold, there may be a potential decrease of around -15% in the month following the upgrade.
Disclaimer
It is essential to note that this article does not constitute investment advice and is purely for educational purposes. Readers are encouraged to conduct their research and seek professional guidance before making any financial decisions related to cryptocurrency investments.
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