True Decentralization: Cardano’s Chang Fork

Cardano's Final Step Is Here

Author

Jonathan Morgan
July 25, 2024

OVERVIEW

True Decentralization: Cardano’s Chang Fork 

We’ve seen Bitcoin’s halving. We’ve seen Dogecoin catch Musk’s attention. We’ve watched Ethereum transition to PoS from PoW. We’ve seen Ripple win against the SEC. Now it’s Cardano’s turn for something big. 🛞 

Bitcoin 2024 in Nashville started today. Look out for tomorrow’s Litepaper as we explore what happened after the first day.

Today’s Litepaper focuses on one big player: Cardano. Why? Because the most important moment in its development is happening right now. 📰

Before we dive in, here’s today’s crypto market heatmap:

And here’s a look at crypto’s total and altcoin market cap YTD:

CARDANO
The Chang Hard Fork: The End Is The Beginning 🔰 

Here we are. 🪧 

This is it. ✅ 

Seven-ish years in the making, and Cardano's ($ADA) final era, Voltaire, is almost done. 🔚 

Chang-ing It Up 👕 

The Chang Hard Fork, part of Cardano’s Voltaire era, is set to hand over control to the community. To pull this off, 70% of stake pool operators (SPOs) need to upgrade, and 80% of exchange liquidity has to be ready. 🆙 

The Cardano community will now be in charge of maintaining and shaping the blockchain. And no, this hard fork doesn’t evolve new tokens like you’ve seen with other blockchains.

Chang Hard Fork: Part 1 🕐️ 

Part one was completed last month with the voting and election of an off-chain (real-life, in-person) governance group. Since then, these critical events occurred ⚠️:

  • Interim Cardano Constitution: Cardano’s off-chain governance group, Intersect, was formed.

  • Interim Constitutional Committee (ICC): Intersect established the ICC, a temporary body that will uphold the interim constitution and vote on early governance actions. The committee has seven members, including three elected by the community.

  • Veto Power: The ICC has veto power, activated through on-chain voting, rolled out as part of the Chang Hard Fork.

Chang Hard Fork: Part 2 🕑️ 

Part two started today with the release of Node 9.1.0. It brings in the final pieces needed for full community governance. This phase moves us from bootstrapping to full-fledged decentralized governance. 👢 

After 70% of the SPOs have upgraded, the people take over.

  • Delegate Representatives (DReps): DReps will register, generate certificates, request ADA delegations, and vote on governance proposals.

  • SPO Voting: SPOs will use their delegated ADA to vote on governance actions. They’ll get to approve or reject proposals.

  • Constitutional Committee: This body will expand beyond the interim seven members and hold full veto power over actions that contradict the constitution.

  • Community-Controlled Treasury: Cardano users will propose treasury withdrawals via governance actions. If approved by the Constitutional Committee, DReps, and SPOs, ADA will be moved out of the treasury.

How long will the update take? No friggin clue. At the time of writing, 7% of SPOs have updated to Node 9.1.0. As soon as something more definitive comes to light, I’ll let you know. 🗞️ 

CARDANO
Wait, That Sounds Kind Of Familiar… 🤔

If Cardano's Interim Constitutional Committee and Interim Constitution bear some resemblance to how the United States was formed, particularly during its transition from the Articles of Confederation to the current Constitution, well, that’s because it does. 🤯 

Interim Constitutional Committee vs. Continental Congress

The Continental Congress acted as the governing body during the American Revolutionary War and the early years of the United States, providing temporary governance.

Similarly, the Interim Constitutional Committee oversees Cardano's governance during its transition to a fully decentralized model. 👍️ 

Interim Constitution vs. Articles of Confederation

The Articles of Confederation served as the first governing document for the United States, outlining a loose framework for national governance until a more robust constitution could be drafted.

Cardano's Interim Constitution serves a similar purpose, providing temporary guidelines and governance principles until the permanent constitution is established. 🧱 

The Transition to the Current Constitution

The drafting and ratification of the current U.S. Constitution involved a Constitutional Convention where representatives debated and created a new governing framework.

Cardano's process involves community participation to draft and ratify a permanent constitution, akin to the Constitutional Convention's role in establishing the U.S. Constitution.

You can read more about Cardano’s Constitutional Committee here. 🇺🇸 

A MODERN INVESTOR CONFERENCE
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Space is going quickly so grab your seat now, and we'll see you in beautiful Coronado, CA! 😎

NEWS
Crypto News In Three Sentences 📰

🗣️ Robert F. Kennedy Jr. Slams Inflation 

Robert F. Kennedy Jr. calls inflation "government theft" and pushes for $BTC as a solution. He suggests issuing treasury bills backed by hard currencies like gold and platinum. Kennedy also wants the federal government to invest in Bitcoin to match its gold reserves. From Finbold.

🇬🇧 Coinbase Fined, Revolut Licensed 

The UK's FCA fined $COIN $4.5 million for AML breaches, while Revolut received a restricted banking license from the PRA. Coinbase's violations included onboarding high-risk customers without proper controls. Revolut's license comes three years after its initial application. Cryptoslate has more.

💸 Mt. Gox Still Holds $6 Billion in Bitcoin 

Mt. Gox creditors are waiting on the fate of 90,000 $BTC, worth about $6 billion. Recent transactions to Bitstamp have fueled market anxiety. A Reddit poll shows most creditors don't plan to sell their holdings. More at Cointelegraph.

☁️ Chainbase Partners with Alibaba Cloud 

Chainbase partnered with Alibaba Cloud, cutting operational costs by half and boosting efficiency. The partnership aims to decentralize Chainbase's data network and enhance AI model development. Chainbase plans to launch its mainnet and governance token, CBT, by Q4 2024. Full story at Coinspeaker.

💼 Galaxy Digital Secures $113 Million for New Fund 

Galaxy Digital’s new venture arm raised $113 million for its first fund, targeting $150 million by next year. The fund focuses on early-stage crypto startups in software, infrastructure, and financial applications. Investments include Plume Network and Ethena, with plans to invest $3-5 million per project. From NFTGators.

💸 Marathon Digital Buys $100M in Bitcoin 

Marathon Digital ($MARA) bought $100 million worth of Bitcoin, going "full HODL" to show confidence in its long-term value. The company's purchase came amid a market dip, with Bitcoin trading at $63,902. Marathon is now the second-largest corporate Bitcoin holder, just behind MicroStrategy ($MSTR). U.Today as more.

📉 EigenLayer Sees $2.3B Outflow in Restaking Sector 

EigenLayer lost $2.3 billion in total value locked (TVL) as investors withdrew from restaking protocols. The sector's yields couldn't compete with higher offerings like Ethena's 10%. One bright spot: ether.fi increased its TVL by $100 million despite the trend. More at CoinDesk.

🔗 BitcoinOS Verifies First ZK Proof on Bitcoin Mainnet 

BitcoinOS claims to have verified the first zero-knowledge proof on Bitcoin’s mainnet, paving the way for new scalability. This achievement promises to build interoperable layer 2 rollups directly on Bitcoin. Expect a live demo of BitcoinOS at the Bitcoin 2024 conference in Nashville. Full story at CoinJournal.

🚀 TON Enables Gasless Transactions with New Wallet 

Tonkeeper launched the W5 Smart Wallet, allowing gasless transactions on the $TON blockchain. Users can cover fees with $USDT or Notcoin instead of Toncoin, simplifying the process for newcomers. The new wallet supports up to 255 simultaneous transactions, improving efficiency and user experience. From CryptoEconomy.

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