What Cardano Holders Must Understand About the Latest Changes
Charles Hoskinson, the founder of Cardano, recently addressed concerns surrounding the options available to ADA holders for withdrawing staking rewards in light of the upcoming Chang hard fork. In response to questions from the community, Hoskinson clarified the process and shed light on the new governance mechanisms and reward systems that will be in place moving forward.
Key Clarifications for ADA Holders
Linda, a Stake Pool Operator (SPO) at MALU Pool, initially raised concerns about the requirement to delegate to a Delegated Representative (DRep) in order to withdraw ADA staking rewards post the hard fork. Hoskinson provided clarity by explaining that users have three options to withdraw rewards: voting of no confidence, abstaining, or delegating to a DRep. Wallets like Lace will simplify the process by automatically selecting abstain if a user chooses delegation only.
- Abstaining requires an active choice, not passive inaction. It involves deliberate decision-making for ADA holders in the new governance framework.
- Concerns about potential mismanagement or misuse of the governance system were also addressed by Hoskinson, emphasizing the system’s flexibility and built-in safeguards for dissenting or opting out.
Understanding the 4 Governance Roles
The Chang hard fork introduces significant changes outlined in Cardano Improvement Proposal (CIP-1694), focusing on various governance roles within the network:
- General ADA holders: They form the foundation of the network and can either directly participate in governance or delegate their voting power to Delegated Representatives.
- Delegated Representatives (DReps): Introduced in the Age of Voltaire phase, DReps represent ADA holders in governance decisions, requiring a thorough understanding of proposals to act in the best interests of those who delegate their voting power.
- Stake Pool Operators (SPOs): These operators, like Linda from MALU Pool, are vital in running nodes and maintaining the blockchain infrastructure. Under the new model, SPOs have additional responsibilities in the governance process.
- Constitutional Committee: A newly established body responsible for ensuring governance aligns with the network’s constitutional principles. They review proposals to maintain constitutional integrity and network viability.
As of now, ADA is trading at $0.3297.
Hot Take: Navigating the Changing Landscape of Cardano
Stay informed about the evolving governance mechanisms and reward systems on Cardano to make informed decisions about your ADA holdings. Understanding the various roles within the network and the options available for staking rewards withdrawal will help you navigate the changes brought about by the Chang hard fork.
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