Emily Walker
During a livestream on December 19, 2024, Charles Hoskinson, founder of Cardano, shared his insights on the ongoing disputes with the Cardano Foundation, organizational challenges, and the strategic direction for 2025.
“Focus on Governance”
Hoskinson started by discussing the transition from theoretical governance to practical governance that occurred throughout 2024, highlighting significant governance discussions held during December’s Constitutional Convention. He pointed out the historical governance issues concerning the Cardano Foundation’s board that have persisted since 2014, alongside conflicts that originated in 2021 and earlier.
He recounted the Foundation’s beginnings, initiated by Michael Parsons on the Isle of Man and later moved to Switzerland. Hoskinson explained that the “Stiftungsrat” (foundation) structure was not originally designed for decentralized cryptocurrency entities: “The rigid structure of the Foundation was never meant for cryptocurrency foundations.” He mentioned efforts to shift the Foundation to a member-based model that promotes decentralized governance, which were ultimately obstructed by internal disagreements and regulatory challenges.
Hoskinson elaborated on a time when most board members supported relocating and restructuring the Foundation, but a dissenting minority contested these changes, leading to legal battles. Following a court decision favoring the majority, a Swiss administration intervened to enforce new board members. Hoskinson argued this made it seem as though the Swiss government decided the board’s composition. He remarked, “To me that sounds like the Swiss government appointed the board.”
In his view, the current Foundation structure lacks essential decentralized governance elements like community accountability. “A foundation that cannot be held accountable by its community, where the board selects its own successors, is flawed,” he said, emphasizing the need to correct this fundamental issue. He clarified, “It’s not about individuals; it’s about the governance framework.”
He noted several initiatives aimed at fostering better governance, including the creation of Intersect and outreach efforts to other contributors in the ecosystem. Hoskinson claimed that Input Output Global (IOG) advocated for the Foundation to integrate into new governance structures that enhance community participation and decision-making. However, the Foundation opted to pursue its own projects like Pragma without collaborating with IOG.
Cardano’s Future for 2025
As he looked toward 2025, Hoskinson emphasized two critical steps needed for the transformation of Cardano’s governance: adopting a community-approved constitution and creating an annual on-chain budget. He pointed out that these measures would facilitate wider involvement and funding for ecosystem developers who have historically received less support. “In a highly competitive sector, we must recognize the need to invest as a community to grow and thrive,” he stressed, urging the community to allocate treasury funds to fundamental builders and infrastructure projects.
He expressed concern that if the Cardano Foundation voted “no” on the upcoming budget, it could potentially impede the long-term growth of the ecosystem. While he noted that this would not impact IOG’s operations directly, it could affect developers and community members reliant on stable funding: “If community oversight was in place… it might be detrimental for ADA holders to vote against necessary funding for ecosystem development.”
Despite these governance issues, Hoskinson expressed optimism about Cardano’s direction. He reaffirmed IOG’s commitment to innovation, interoperability, and advancing technology, irrespective of governance developments. He highlighted significant upcoming events including Bitcoin integration, improvements to the Lace wallet, and the expected influence of the privacy-focused Midnight sidechain. “Midnight will be a monumental event for the Cardano ecosystem, airdropping to over 100 million individuals while connecting with major networks,” Hoskinson predicted.
To bolster Cardano’s position, IOG aims to enhance core functionalities, improve essential tools, and ensure effective partnerships with custodians and wallet platforms. Hoskinson stated that IOG would not look for treasury funds for these advancements, opting to use its resources instead: “We’re going to make Bitcoin work with Cardano, and we’ll present an impressive demo at Bitcoin 2025.”
As of the latest update, ADA was priced at $0.79.