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Cardano successfully implemented the Chang hard fork, initiating the Conway era. This step represents significant progress towards full decentralization. This milestone included the implementation of the CIP-1694 governance model, allowing ADA holders to actively vote on network decisions. According to the network’s blog post, this significant milestone “realizes the vision of a fully autonomous and decentralized network.”
Changes in Governance and Reward System
However, following the Chang hard fork, ADA holders began to worry about changes in governance and reward systems. Cardano’s founder Charles Hoskinson responded to these growing concerns.
“To withdraw staking rewards from the network, a user must choose one of three options: not voting, abstaining, or delegating to a DRep.”
Linda, as a stake pool operator of MALU Pool, first voiced these concerns in an X post, stating: “After the next hard fork, you will likely need to delegate to a DRep to continue withdrawing your staking rewards. (This is not confirmed yet, but it seems very likely.)” This statement led to intense discussions within the Cardano community about how governance changes would affect staking rewards.
Hoskinson’s Explanations
In response to Linda, Hoskinson detailed that ADA holders must choose one of three options to withdraw staking rewards: “not voting, abstaining, or delegating to a DRep.”
Hoskinson suggested, “If a user only chooses delegation, wallets like Lace will automatically select abstaining to simplify the user experience.”
An X user asked if abstaining meant selecting the abstaining delegation option. Hoskinson clarified that abstaining is an active choice, noting that ADA holders had confused abstaining with doing nothing. However, Hoskinson stated, “It is an action, which is why I clarified my tweet.”
Concerns in the New Governance System
Following the implementation of the Chang hard fork, there are growing concerns about the new governance system, particularly the potential for misuse or mismanagement of the roles of DReps. A user expressed their concerns, saying: “I choose to abstain. I don’t want to see little girl and boy influencer DReps zeroing out the treasury in this experiment.”
“That’s why this option is there. You can even vote no confidence in the entire system.”
Hoskinson reassured the concerned community by emphasizing the flexibility brought by the new governance system. According to Hoskinson, the new governance system allows users to express their views.
Currently, ADA holders hold the key to the network. They can participate in voting or delegate their governance rights to DReps. Stake Pool Operators like Linda continue to participate in the governance process while maintaining the network’s infrastructure.
At the time of writing, ADA is trading at $0.3253, experiencing a 1.63% decrease in the last 24 hours.
