How and why to delegate ada with the Chang upgrade

Following on from our blog on Cardano CIP-1694, where we explain the foundation of decentralized governance, its history, and what it means, we can now dive further into delegating the voting rights of your ada, which is a vital way to shape Cardano’s future in the age of Voltaire actively. It allows you to participate in the decentralized decision-making process that underpins the blockchain’s social contract, ensuring that every ada holder’s voice helps guide its direction. You contribute to a resilient, inclusive, and community-driven ecosystem through delegation.

The Chang upgrade comprises two hard forks, Chang and Plomin, and marks a pivotal step in Cardano’s evolution. It places the future of the blockchain firmly in the hands of its most invested stakeholders: the ada holders. 

The importance of delegated representatives
Delegated representatives (DReps) are crucial in the Cardano network's decision-making processes. They effectively advocate for and make informed decisions on behalf of the Cardano community. 

Delegating your voting rights to a DRep is essential to supporting the ecosystem's growth and development. By leveraging expert knowledge in the voting process, ada holders can raise their voices through nominated DReps, who will leverage the voting power of multiple individual ada holders. This way, everyone can contribute to shaping the protocol's future.

Staking rewards
After the Plomin hard fork, you will continue accumulating staking rewards. However, as specified in CIP-1694, you will not be able to withdraw them unless you delegate your ada’s voting rights to a DRep or a predefined voting option. The community took this decision at the first CIP-1694 workshop in Longmont, CO, in March 2023.

Like rewards staking with stake pool operators, the staked ada never leaves your wallet, and staking does not impose new spending or selling restrictions. Delegation only needs to be done once. It takes just a few minutes of your time and does not involve any additional cost or risk, but it enables you to contribute to shaping the future of Cardano. 

Compatible wallets
Intersect maintains a list of wallets that support delegation. More wallets are regularly added to the list, so if your wallet is not on the list today, you can check back later or use one of the compatible wallets with your wallet's recovery phrase.

How to choose a DRep

1. Browse the list
2. View details of individual DReps
3. Select a DRep or choose a predefined option.

In detail,

1. Cardano GovTool has a directory of registered DReps. You can sort them by voting power, registration date, status, or unsorted (random). 
2. Click on the ‘View details’ button of a DRep to read the information they have provided. You can also use tools like Tempo or 1694.io/DReps to discover their voting history and choose someone whose philosophy aligns with your own.
3. Choose an active DRep you trust or one of the two predefined voting options.

For more information on using GovTool, visit the Cardano GovTool documentation website.

Predefined voting options
You can delegate to one of two predefined voting options instead of a DRep.

An abstain option is a way to ‘opt-out’ of playing a part in decision-making within the governance system. It acts as if your stake is cast to vote ‘abstain’ on all GAs. You will have participated in governance but are not supporting a yes or no vote on proposals. Your voting power, however, will count towards a quorum on all votes. Your staking rewards will be available.

A no-confidence option acts as if your stake is cast to vote ‘no’ on all governance actions (GAs) and ‘yes’ to votes of no confidence. This option is extreme, and you would only do it if you wanted the current constitutional committee replaced.

Voting on a particular governance action
GovTool allows you to view the current Governance Actions (GAs). If you haven’t yet delegated your voting power to a DRep to vote on your behalf, you can register either as a DRep or as a direct voter. As a direct voter, your voting power will reflect the total ada in the wallet linked to GovTool. As a DRep, you’ll create an off-chain profile to campaign for delegation, enabling you to vote with the ada delegated to you and any personal holdings. In both cases, voting is conducted through GovTool by linking your wallet.

DRep campaigning
It is vital that DReps campaign around their intention to vote on any GA. Lobbying for stakes and building support for their position will determine how strong a DRep’s voting power is and, ultimately, how strong a voice they will have at the vote.

DReps play an essential part in Cardano’s decentralized governance structure. Not only are they vital in decentralizing the decision-making process, but they are also crucial in breaking down complex governance actions into what they mean for ada holders and communicating why ada holders should care about them. In this way, DReps need to understand that they are not just operators of decentralized democracy but also educators and, as such, must be masterful communicators.

DReps enrich the Cardano ecosystem and should be seen as the true representatives of the community.

Intersect remains committed to facilitating all areas of decentralized governance, so we will continue to update you on the progress. Keep checking back for more information. We’re interested in hearing more from you about subjects important to you, such as Cardano’s governance. Your ideas and suggestions are crucial to us. If you have any questions, ideas, or suggestions, please get in touch via email, X, or LinkedIn.