Charles Hoskinson, the founder of Cardano, has recently shared his opposition to the burning of the blockchain network’s over 1.5 billion ADA treasury tokens, valued at around $500 million.
On September 5, Hoskinson took to social media to address the issue, highlighting that the treasury assets were not simply preprinted tokens but were actually created through block production and transactions.
He argued that burning these assets would essentially be stealing from Stake Pool Operators (SPOs) and ADA holders, stating:
“The entire treasury comes from people building blocks and economic activity. You are effectively stealing from every SPO and ADA holder if you burn the treasury.”
These comments from Hoskinson have come at a time when there have been increasing calls to burn the 1.5 billion ADA tokens in the treasury following the recent implementation of decentralized governance on Cardano.
Cardano recently completed the first phase of its Chang hard fork on September 1, marking a significant milestone towards achieving full self-governance. This move positioned Cardano as the first layer-1 blockchain to implement a token-based governance system.
With this progress, the Cardano community is now exploring how to make use of its new governance powers. A community member by the name of Big Pey posed a question regarding the potential burning of treasury assets, asking:
“Now that Cardano has full on-chain governance. There’s 1.5 Billion ADA in the treasury. The ADA community could vote to burn all of the ADA. Would you vote to burn all of the ADA? If not, what do you think we need to spend the funds on?”
This proposal has elicited diverse reactions from the community. While some view burning the tokens as a positive step that could significantly benefit ADA’s price, others caution against the potential negative implications of such a move.
One of the network’s decentralized representatives (DReps), Jaromír Tesař, believes that burning the assets would be a “terrible mistake.” He suggested that the funds could be put to better use in supporting Cardano’s development in various ways.
“We could launch several more Catalyst Funds, use ADA for liquidity in DeFi, accelerate the development of scalability technologies, fund the deployment of USDC and USDT on Cardano, and even invest in marketing.”
In conclusion, the debate over whether to burn the 1.5 billion ADA tokens in Cardano’s treasury continues to spark discussions within the community. Charles Hoskinson’s firm stance against burning these assets has brought attention to the potential consequences such a move could have on Stake Pool Operators and ADA holders.
As Cardano moves towards full self-governance, the community faces the challenge of responsibly utilizing its newfound governance powers. While burning the treasury assets may have its proponents, others advocate for more strategic allocation of the funds to support the network’s development and growth.
Ultimately, the decision on whether to burn the ADA tokens or allocate them to other initiatives will require careful consideration and input from the Cardano community. Whatever the outcome, it is clear that the future of Cardano’s governance and financial management will play a crucial role in shaping the network’s trajectory in the coming months and years.
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