The Cardano Transition to Decentralized Governance

The Cardano blockchain is transitioning to fully decentralized governance, as announced by the Cardano Foundation on X.

> “Tonight, Cardano evolves. The Plomin hard fork takes effect, marking the transition to full decentralized governance,” stated the Cardano Foundation. “ADA holders gain real voting power—on parameter changes, treasury withdrawals, hard forks, and the blockchain’s future, a milestone in blockchain governance.”

On Friday, the Plomin hard fork was approved for enactment after meeting three required thresholds during the network’s interim governance period. The results showed that:
1. At least 85% of stake pools had upgraded to a Cardano node version that could process the new protocol rules.
2. Over 51% of stake pool operators (SPOs) voted for the upgrade.
3. More than 67% of the Interim Constitutional Committee (ICC) confirmed that the hard fork was constitutional, paving the way for decentralized governance.

Last Thursday, the Cardano Foundation confirmed their “yes” vote for the Plomin Hard Fork governance action, noting its constitutional nature. “The governance action to hard fork to Protocol Version 10 ‘Plomin’ is constitutional, and it fulfills all procedural requirements, enables CIP-1694 governance and Plutus primitives, and complies with guardrails,” they stated.

Key Changes of the Plomin Hard Fork

The Plomin hard fork brings several key changes to Cardano’s governance and functionality. It enables all seven governance actions stated in Cardano Improvement Proposal CIP-1694, including treasury withdrawals, new constitution proposals, and votes of no confidence. Furthermore, it activates decentralized representative (DRep) and stake pool operator (SPO) voting on applicable governance actions.

Notably, the hard fork imposes a restriction on staking reward withdrawals, allowing them only by accounts that delegate to a DRep, enhancing the network’s decentralized governance framework. This hard fork will ensure that the Cardano treasury is governed by ADA holders, with the governance action first submitted on-chain on December 20.

As of the time of writing, Cardano’s ADA token was trading around $0.91, down over 5% in the past 24 hours, according to The Block’s Price Page.