Cardano is preparing for the Chang hard fork, which will bring in the Voltaire era by introducing on-chain governance. The upgrade allows ADA holders to vote directly on key decisions, moving the platform closer to a fully decentralized blockchain ecosystem.
A deep dive into Cardano’s development stages
Cardano’s development is divided into phases known as “eras,” named after influential poets, mathematicians, or computer scientists. Every era introduces new features through hard forks.
- Byron: Launched Cardano’s foundational network, enabling ADA transactions.
- Shelley: Transitioned the network to decentralization with community-driven block production.
- Goguen: Introduced smart contracts and the capability to build decentralized applications.
- Basho: Focused on optimizing scalability and interoperability.
- Voltaire: Will introduce decentralized governance.
In addition to the main phases, eras often include multiple sub-eras, like Goguen (e.g., Allegra, Mary, Alonzo), which bring more specific features. The Chang hard fork will be the first hard fork and sub-era of Voltaire.
What is the Chang hard fork?
The Chang hard fork allows ADA holders to vote on protocol changes and governance actions, with the option to delegate their voting power to designated representatives, known as DReps.
In addition to governance, Chang brings enhancements to Cardano’s smart contract platform through the introduction of PlutusV3. PlutusV3 includes new cryptographic primitives, such as BLS12-381 and Keccak-256, which improve the security and efficiency of operations like zero-knowledge proofs and digital signatures.
Chang also adds bitwise primitives, allowing developers to perform low-level data manipulations within smart contracts. This leads to faster execution and reduced costs for DApps, making it easier for developers to create more complex and efficient DApps on Cardano.
The upgrade will also refine transaction fee calculations for DApps by adjusting protocol parameters related to reference scripts. Reference scripts help reduce the size of transactions, thus lowering the cost for users and increasing the network’s capacity to handle more transactions simultaneously.
Node operators, particularly stake pool operators, need to upgrade to version 9.1 to support the new governance mechanisms and smart contract improvements. For the hard fork to be successful, 70% of the network’s stake pool operators must upgrade to version 9.1. The new version was released on July 25, and as of August 5, around 35% are using it.
What past hard forks reveal about ADA’s future
Historically, ADA’s price has shown a pattern of downturn following major Cardano upgrades, with one exception. The Allegra upgrade saw a significant price appreciation of 133%. This anomaly skews the overall average to a 9.88% increase one month after upgrades. When removing Allegra from the dataset, the average price change reveals a decline of -14.74%.
Given the current market downturn, it remains difficult to predict the exact direction ADA will take after the Chang upgrade. However, if the historical trend holds, ADA could drop by around -15% in the month following the hard fork.
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