Cardano (ADA) reached the conditions to launch the long-awaited Chang hard fork. More than 70% of nodes are signaling the new chain version, which may lead to the imminent announcement of the hard fork.
Cardano (ADA) may complete the most long-awaited event in 2024, introducing the Chang hard fork. The condition was that at least 70% of nodes would signal readiness. The main goal of the fork is to upgrade Cardano and allow even more decentralized coordination between nodes. The actual fork will not be centrally coordinated and will depend on nodes using the 9.1.0 version.
The Cardano community is still waiting for centralized services like Coinbase and Binance to also upgrade their nodes for the new features. Several exchanges have also moved their nodes to the new version. The Chang hard fork has been in the making for months, and was expected to arrive in June. In the past few weeks, nodes accelerated the adoption of the new version.
The Cardano Chang fork also coincided with a price recovery, where ADA tokens returned to $0.34. ADA has traded sideways for years, awaiting a change to the network that would make it competitive.
After the node updates, Cardano will have a new constitution proposed by the Intersect organization. The governance will also have a seven-member interim constitutional committee, with three representatives from the community.
At the second stage of the Chang hard fork, Cardano will also select delegates who will vote on behalf of ADA holders. Currently, ADA can only be locked for simple staking and passive income, but in the future, wallets will be able to push proposals.
Charles Hoskinson, the creator of Cardano, has spent over a decade building a community. Cardano’s lofty goal is to become a decentralized nation, which now has to draw up its constitution. The actual draft of the constitution is still a work in progress.
During the second stage, the influence of the community will increase, and all ADA holders will be able to vote on future proposals. Becoming a governance token, however, exposes the Cardano network to attempts at governance attacks from organizations or whales, especially when it comes to distributing rewards.
The other big change will be a 1B ADA treasury that will be distributed according to votes. The addition of the treasury will have a limited dilution effect, as ADA in circulation is already above 37B. In total, Cardano will cap its supply at 45B ADA, which will be produced and distributed over time.
BREAKING: The Cardano Chang Hard Fork is almost here 👀$ADA pic.twitter.com/ci90NCbaXN
— TapTools (@TapTools) August 8, 2024
ADA is still down 90% from its peak
ADA peaked above $3 during the 2021 bull market, when it ran with the other promising L1 and L2 projects. The ADA hype, however, did not result in new products and Cardano so far cannot compete with more actively used networks.
As a result, Cardano has a very limited DeFi ecosystem, with under $200M in value locked. Cardano’s apps are also lagging, with limited usage on its DEX. The Cardano chain has limited play-to-earn games and lagged in meme token creation.
One of the main accusations against Cardano is that its network took a long time to reach a state where newer projects are completed in a fraction of the time. Additionally, data showed that Cardano has existed as a ‘ghost chain’ for years, with no real users.
In the short term, ADA sets expectations for running up to $0.49, with a mid-range outlook of $1. Currently, Cardano still relies on its loyal community, as it is not part of any related narratives.
The other problem for Cardano is that its network still does not generate fees, and it has to find a way to compensate delegates. So far, compensation comes only through the issuance of new ADA tokens, inflating the supply.
The Cardano network only produces fees in the thousands of dollars, lagging behind other chains with more developed revenue-generating apps. In the short term, however, Cardano news led to an immediate spike in activity and token turnover. ADA activity jumped from 2% to 9% of tokens changing hands as the news of the imminent Chang hard fork spread.
Cryptopolitan reporting by Hristina Vasileva
