How we will launch Shelley

This Shelley launch is unlike a normal cryptocurrency release or hard fork because Cardano is moving from a federated model to a fully decentralized one.

Byron launched in September of 2017 running in federated mode, with core consensus nodes operated only by the Cardano Foundation, Emurgo and IOHK.

Five years of research into the Ouroboros family of proof of stake protocols made it possible to move Cardano from a static federated design to a dynamic, decentralized one.

The incentivized testnet, launched in December of 2019, was the first step to check whether people outside the federated set would actually run Cardano nodes.

The incentivized testnet was a full peer to peer version of Shelley with stake pools and delegation, drawing about 12 billion ADA into staking, roughly 40 percent of the total supply, while also measuring network quality and block production.

The incentivized testnet was an overwhelming success: the decentralization target was 1,000 stake pools instead of the original three entities, and over 1,000 registered with around 300 regularly making blocks.

The phased transition to Shelley began with the Byron reboot, launched on March 31st, 2020, carrying the bridge code needed to upgrade onto Ouroboros BFT.

The transition runs through three phases: Byron running Ouroboros BFT, the Shelley upgrade phase, and the Shelley hybrid phase.

Byron OBFT is what shipped in Daedalus Flight client 3, and alongside it comes a friends and family Shelley Haskell testnet, an internal alpha for a small group of top stake pool operators to verify the node and command line first.

The alpha operators are meant to train the rest of the stake pool community through channels like Telegram before the public Shelley node and CLI testnet opens, giving incentivized testnet operators their first real chance to rebuild infrastructure.

The balance check testnet bundles the node, wallet and Daedalus with the consolidated Byron and Shelley history, validating that incentivized testnet rewards, worth tens of billions of ADA, reconcile correctly.

Balance check marks the end of life for the incentivized testnet and is where exchanges get a full listing experience so their integrations are forward compatible with Shelley mainnet.

During the Shelley upgrade phase, wallets like Daedalus, Yoroi and Ledger will show the full staking interface, but it stays inactive because the network is still running under Byron's federated Ouroboros BFT consensus.

Once the upgrade window closes, a hard fork shuts off the Byron relays entirely, so any exchange still on Byron gets locked out until it upgrades.

The Shelley hybrid phase introduces a decentralization parameter, d, that starts at 1 and lets the old federated nodes keep making blocks for free while stake pools begin registering.

As d decrements epoch by epoch, an increasing share of each epoch's slots gets made by registered stake pools instead of the core federated nodes.

There is no cap on how many stake pools can register even though the k parameter targets around 1,000, and d can be moved back up as a safety valve if a bug or a catastrophic event occurs.

Epochs will run four to five days, and depending on how fast d decrements, for example 0.1 or 0.2 per epoch, the hybrid phase could last around two months or as little as 20 days.

These are real stake pools earning real rewards during the hybrid phase, not another test net.

The incentivized testnet's roughly 40 percent participation lands between Tezos, which is over 60 percent, and Tron, around 20 to 30 percent.

The phased rollout gives people weeks rather than months to upgrade, and once d hits zero the network is fully decentralized with the federated nodes retired for good.

The Hard Fork Combinator is a new construct that lets Cardano gracefully switch between consensus systems with no loss of availability or performance.

Upgrading tens of thousands of nodes, exchanges, wallets and explorer infrastructure all at once is genuinely complex, but simulations and formal methods give confidence the switchover will be graceful rather than forcing a jarring, hard upgrade deadline.

Cardano.org and the wider set of GUI assets are being completely redesigned for the Shelley launch, with McCann Dublin working alongside the Cardano Foundation and Emurgo.

Shelley introduces a new bech32 address format, roughly half the size of current addresses, that wallets will rotate to once the hard fork begins.

Depending on who you are, the path differs: everyday Daedalus users just wait for staking to switch on, stake pool operators get hands on in the Shelley node and CLI testnet, and exchanges integrate through balance check.

Once the Shelley hybrid phase begins, no Byron wallet or infrastructure will work anymore, so anyone still on an old Byron wallet must migrate, with guides to be released on how.

Running Ouroboros BFT during the hybrid phase is an uncompensated safety mechanism, and given how the incentivized testnet trended, a high degree of decentralization is expected within a month of Shelley's launch.

Because the Hard Fork Combinator has already solved the hard federated to decentralized jump, future upgrades like Goguen, Basho and Voltaire will be far less complicated than Shelley.

The mechanics recap: the Byron reboot aligns everything onto Ouroboros BFT, the upgrade phase runs a full Shelley node without turning its features on, and the hybrid phase triggers the hard fork, decrementing d from 100 percent down to zero.

A fully decentralized Shelley is projected to run on about a thousand operators, be a hundred times more decentralized than Bitcoin, and handle several hundred to over a thousand transactions per second on the base Ouroboros protocol alone.

The next upgrade, Goguen, moves the ledger rules from UTXO to extended UTXO and adds dedicated multi asset support alongside the Plutus smart contract tooling.

Goguen, Basho and Voltaire are already being worked on in parallel by their own teams, including early Hydra scaling stubs being prepared for when they are needed.

This upgrade has been more than 24 months in the making, and because Byron is a real cryptocurrency rather than a testnet, Cardano invested heavily in backward compatibility so every node can still validate the full transaction history back to September of 2017.

Aparna Jue will run a product workshop at the end of April with more concrete dates, and the friends and family phase is already starting, with Duncan Coutts running a Shelley node himself.

Rather than a two to three month upgrade window, the plan is for a short upgrade phase of about four weeks, with balance check giving enterprise integrators extra lead time, though a single huge exchange might get more time by exception.

A wave of videos, blog posts, tutorials and guides is coming, alongside a refreshed Cardano.org as a single source of truth and a full rewrite of Cardano Docs.

Getting here took roughly a million lines of code and about two years of development effort, and the same federated to decentralized playbook could work for other chains, for example if Ripple's XRP wanted to decentralize, though Ethereum's move from proof of work differs.

The incentivized testnet beat expectations by a wide margin: the team expected 10 to 20 percent participation and got roughly 40 percent instead.

How smoothly the team navigated the Byron reboot codebase, plus the confidence from simulations and formal methods, suggests Shelley will feel production ready rather than needing months of alpha debugging.

More concrete dates for the node and CLI testnet and for balance check are coming out of the product workshop, on a weekly or biweekly release cycle.

Users should check now that their incentivized testnet rewards are properly consolidated, since that is the last chance to flag an issue before the upgrade phase, after which most people just install the new wallet and wait for staking to switch on.

Warns viewers not to miss a date: this rollout will move fast rather than run for months like a typical testnet, so send questions through the video comments or Reddit.

The Emurgo and IOHK Twitter and YouTube accounts are the best places to catch weekly, sometimes daily, Shelley updates as the rollout moves fast.