A landmark achievement in Cardano's journey toward decentralized governance

On Sunday, September 1, 2024, at epoch 507, Cardano, with the active participation and support of its community, reached a historic milestone by successfully executing the Chang hard fork #1. This pivotal upgrade, a testament to collective efforts, represents a significant leap forward in Cardano's ongoing journey toward fully decentralized governance.

The Chang hard fork is not just a technical advancement; it embodies the Cardano community's commitment to evolving the blockchain infrastructure to support a more democratic and community-driven decision-making model.

Intersect’s role

Intersect, a member-based organization, champions and coordinates Cardano’s progression from being one of the most decentralized blockchains to its end goal of a fully decentralized, community-governed ecosystem.

The hard fork working group comprises specialist members charged with communicating with all the stake pool operators, centralized exchanges, and decentralized application developers that make up the network operators—the node runners. The working group has set objectives, communicated target dates, and enlisted technical expertise to help it be ready in time.

When a sufficient number of the node runners had communicated their readiness, Intersect met, voted, and decided to initiate the first Chang hard fork.

A tribute to Phil Chang

This pivotal upgrade, commemorating Phil Chang, is a testament to years of rigorous research and collaboration across the blockchain community and sets a new benchmark for the industry.

Phil Chang's significant contributions to Cardano's governance strategies and the Voltaire concept have left a lasting impact. Despite his untimely passing in 2022, Phil’s vision shapes Cardano’s evolution. This upgrade establishes Cardano’s entry into the Conway era and sets the stage for the Voltaire development phase – a self-sustaining and community-governed blockchain.

CIP-1694: evolution to community governance

A Cardano improvement proposal (CIP) provides information to the Cardano community describing new features or processes for Cardano. You can read all about the CIP process here.

The Chang upgrade is the implementation of CIP-1694, representing a significant shift toward a more decentralized and community-driven governance model and moving Cardano into the Voltaire phase. This CIP proposes the concept and outlines the process to change Cardano governance from the founding entities Input | Output, the Cardano Foundation, and Emurgo to the Cardano community. The community has been actively discussing and voting on CIP-1694 since early 2023, and it has become the most discussed and commented-on CIP in Cardano history.

The hard fork combinator (HFC) event

A hard fork combinator is an essential tool in Cardano, designed to seamlessly integrate new protocols following a hard fork event.

When a hard fork happens, it effectively splits a blockchain into two distinct branches that operate independently, with the new branch lacking the historical data of the original chain. This process typically arises from implementing significant upgrades or modifications to the blockchain's protocol parameters. While hard forks are typical across blockchains, the hard fork combinator, developed by Input | Output, offers a unique solution tailored for Cardano. It ensures a smooth transition by merging the protocols before and after the upgrade, mitigating potential disruptions and avoiding the need for a network restart.

By utilizing the hard fork combinator, Cardano can maintain the continuity of its ledger, ensuring the stability and reliability of the blockchain during significant upgrades. This approach allows multiple protocols to coexist without forcing all network nodes to update simultaneously, enhancing trust and confidence in the blockchain.

The Chang upgrade: A two-phase evolution

The Chang upgrade unfolds in two essential phases:

Chang #1: This initial phase, launched with the hard fork combinator, introduces governance capabilities to the Cardano blockchain as outlined in the Cardano improvement proposal (CIP-1694). It marks the beginning of the technical bootstrapping process, laying the groundwork for future developments. The upgrade ensures no disruption to the blockchain's operation, preserving its continuous history.

Chang #2: Building on the foundation of Chang #1, this phase will fully transition the protocol to decentralized governance. It will activate advanced governance features, including the role of decentralized representatives (DReps) and a comprehensive governance toolkit. These enhancements will complete Cardano’s move to community-driven decision-making.

Development and community readiness

Significant updates to the Cardano protocol are released as updates to Cardano node, the top-level component in the Cardano network. The networking layer is the driving force behind delivering information exchange requirements.

Input | Output developed and released Cardano node v9, a crucial component for the Chang upgrade. A majority of stake pool operators (by stake) and a majority of exchanges (by liquidity) have implemented it. Decentralized application (DApp) developers are well on their way to updating their applications to leverage the new features of Cardano node v9.

Several key criteria were successfully met to ensure the smooth execution of the Chang hard fork:

• Node Stability: No critical issues were present in node components, including ledger, CLI, and consensus.
• Performance Analysis: Benchmarking and cost-performance analysis were satisfactory.
• Community Preparation: The community, including exchanges and DApp developers, was well-informed and prepared for the upgrade.
• Critical Mass: Over 92% of the stake held by stake pool operators (SPOs) and over 95% of exchange liquidity were on Cardano node version 9.1.0. A large and increasing number of DApp developers,  over 83% of total value locked (TVL) across top 20 DApps, reported ‘ready’ status.

Looking ahead: Chang #2 and beyond

The forthcoming Chang #2 will represent another leap forward, fully implementing the governance mechanisms proposed in CIP-1694. This phase will enable decentralized representatives to play a crucial role in the governance process and introduce a suite of governance actions that enhance community involvement.

The Chang upgrade is a technical achievement and a transformative moment for Cardano and the broader blockchain ecosystem. It underscores the collective effort of the Cardano community and sets a precedent for future decentralized governance models in the industry.

As Cardano progresses toward complete decentralization, the successful execution of the Chang hard fork marks a historic achievement and a significant step toward realizing a truly self-sustaining blockchain governed by its community.