Cardano’s Chang upgrade just went live — here’s what it means
Cardano’s Chang Upgrade Just Went Live — Here’s What It Means
The Cardano blockchain has officially completed the first phase of its Chang upgrade, marking a major step toward decentralized governance.
At 10:44 PM London time on Sunday, Cardano initiated the process of transferring control of the $13 billion blockchain to ADA token holders.
According to Frederik Gregaard, CEO of the Cardano Foundation, many community members were drawn to Cardano due to its vision of a decentralized governance model.
“Every ADA holder can contribute to the ecosystem’s evolution,” Gregaard told DL News. “The community will collaborate, innovate, and govern by mutual agreement.”
A New Era of Decentralized Governance
Cardano is the first major blockchain to implement a token-based governance system, marking the beginning of the Voltaire era—named after the French writer and advocate for free speech. Previously, the network was managed by Cardano’s founder Charles Hoskinson’s engineering firm, Input Output Global, along with the Cardano Foundation and EMURGO, its commercial arm.
While many in the community celebrate this transition, decentralization also presents challenges. Similar governance structures, such as Decentralized Autonomous Organizations (DAOs), have faced scrutiny due to excessive budgets, lack of checks and balances, and centralization of power among a few stakeholders.
The Chang upgrade reinforces Cardano’s commitment to decentralization, setting a precedent for other blockchains to follow.
Why Decentralization Matters
Florian Volery, co-founder of Liqwid Labs, the firm behind Cardano’s lending protocol Liqwid, highlighted the benefits of decentralization:
“Without a central authority, it becomes much harder for governments or corporations to censor information or transactions.”
This shift could make Cardano more attractive to institutional investors exploring decentralized finance (DeFi). However, Cardano faces strong competition from Ethereum, which dominates the DeFi landscape and has even attracted major asset managers like BlackRock.
Pablo Bejarano, CEO of Cardano-based asset manager PBG, believes the Chang upgrade will expose the lack of decentralized governance on other blockchains.
“On competing blockchains, decision-making is often centralized among a few players,” Bejarano told DL News.
Overcoming Technical Challenges
Despite its progress, Cardano still has technical hurdles to address. The network only achieved smart contract capabilities in 2021, limiting its ability to compete with more established DeFi ecosystems. Additionally, Cardano has struggled with an Unspent Transaction Output (UTXO) issue, which restricts multiple users from interacting with the same DeFi protocols simultaneously—a problem not found in Ethereum or Solana.
This UTXO bottleneck can cause transaction failures, particularly when users attempt to swap the same tokens on a decentralized exchange at the same time. Resolving this issue will be crucial for Cardano’s scalability.
Avoiding DAO Pitfalls
Cardano’s governance model aims to avoid the common pitfalls of DAOs by introducing Delegated Representatives (DReps)—community spokespeople who participate in governance decisions. These representatives will be part of a tricameral system, ensuring that governance includes multiple perspectives and built-in checks and balances.
While this structure seeks to improve decentralized governance, its execution will determine its success. Involving thousands of ADA holders—many of whom may not fully grasp the governance model—could lead to disappointment if expectations aren’t met.
What’s Next for Cardano?
Although the Chang upgrade has officially begun, Cardano’s transition to full decentralized governance is still in progress. A second upgrade later this year will introduce the final governance features, solidifying Cardano’s position as a leader in decentralized blockchain governance.
With this shift, Cardano is making a bold statement: decentralized governance isn’t just an ideal—it’s an achievable reality. How well it navigates this transition will shape the future of its ecosystem and influence the broader crypto industry.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
Want to learn more? Visit PBG.io and join our community to stay updated on Cardano’s developments.
