Cardano (ADA) is getting ready to introduce self-governance. How this should work is outlined under the proposal CIP-1694 and is currently being discussed in the community. Will this be a breakthrough for Cardano?
As the number seven most highly capitalized cryptocurrency in the world, Cardano (ADA) regularly produces headlines. On the one hand, there are optimistic descriptions of the future, often pushed by Cardano founder Charles Hoskinson himself. On the other hand, voices are getting louder and louder that turn away from ADA in disappointment and classify Cardano as “vaporware”. The fact is: The price curve of ADA is bobbing along and the majority of investors are clearly in the red. Now hopes are turning to self-governance for Cardano, which has been prominently featured on ADA’s roadmap since September 2022 at the latest.
Specifically, blockchain firm Emurgo has submitted what it calls a Cardano Improvement Proposal (CIP), number 1694. Emurgo is one of the founding members of Cardano and CIP-1694 is supported by Input Output, the majority founder. Currently, Input Output is promoting workshops on CIP-1694 and currently informs that work on a voting module called Catalyst at ADA is almost complete. With CIP-1694, the additional function as a governance token will be enabled at ADA in perspective and Cardano strategies will be decided by the community in the medium term. Emurgo proposes to go through this process in stages, starting with a committee to create a kind of Cardano Basic Law.
Thus, it becomes apparent: ADA will be “governed” by a Decentralized Autonomous Organization (DAO) in the medium term, and the divided camp of investors will have to come to decisions there. This corresponds to the principle of the greatest possible decentralization, which Cardano always promised, and has its charm, at least in theory. However, one could also scoff that Input Output, Hoskinson and Emurgo want to escape responsibility with CIP-1694.
Conclusion: Self-management at Cardano – way out of stagnation?
There have been plenty of initiatives at Cardano over the past few years to help ADA become money-making use cases. However, ADA’s price curve shows that these have largely fizzled out to no effect and Cardano, for example, is not really gaining a foothold in the high-growth Decentralized Finance (DeFi) space, despite the new stablecoin DJED. Whether CIP-1694, and with it the beginning of self-governance at Cardano, can turn the tide could become an essential question for ADA.