Cardano’s founder, Charles Hoskinson, has cleared the air about how ADA holders will manage their staking rewards after the upcoming Chang hard fork. This update is important because it changes how the Cardano network is governed.
Staking Rewards and Governance Options
The new system gives ADA holders three options when it comes to their staking rewards:
- Vote of No Confidence: You can express your dissatisfaction with the system by voting against it.
- Abstain: You can choose not to participate in the governance process. This requires an active choice, not just inaction.
- Delegate to a DRep: You can choose to have your voting power represented by a Delegated Representative (DRep).
Hoskinson emphasized that wallets like Lace will automatically choose the “abstain” option if you only select delegation, making the process easier.
Community Concerns and DReps
Some community members are worried about the new DRep roles and the potential for misuse of the governance system. They fear that DReps might not act in the best interests of the community.
Hoskinson reassured the community by explaining that the system is flexible and allows for dissent. You can always choose to vote “no confidence” in the entire system if you don’t trust the process.
The New Governance Roles
The Chang hard fork introduces significant changes to Cardano’s governance, with four key roles:
- General ADA Holders: The backbone of the network, they can directly participate in governance or delegate their voting power to DReps.
- Delegated Representatives (DReps): These ADA holders represent other holders in governance decisions and are expected to have a deep understanding of the proposals.
- Stake Pool Operators (SPOs): They continue to run nodes and maintain the blockchain’s infrastructure, and now also have a role in the governance process.
- Constitutional Committee: This newly formed body ensures that governance actions align with the network’s constitution. They review proposals to ensure they are in the best interests of the network’s long-term health.
These changes are designed to make Cardano’s governance more decentralized and responsive to the community.
