Charles Hoskinson, the founder of Cardano, recently expressed his opposition to burning the blockchain network’s over 1.5 billion ADA treasury tokens, valued at around $500 million. In a social media post, Hoskinson highlighted that these treasury assets were not just preprinted tokens but were earned through block production and transactions. He argued that burning these assets would essentially amount to theft from Stake Pool Operators (SPOs) and ADA holders.
The controversy arose following the completion of the first phase of Cardano’s Chang hard fork, which established decentralized governance on the platform. As Cardano became the first layer-1 blockchain to implement a token-based governance system, discussions on how to utilize the 1.5 billion ADA treasury tokens began. Some community members suggested burning the tokens, while others proposed alternative uses for the funds.
One community member, Big Pey, initiated the conversation by asking for input on potentially burning the treasury assets. While some believe burning the tokens could positively impact ADA’s price, others caution against such a move. Jaromír Tesař, a decentralized representative (DRep) on the network, opposed burning the assets and suggested using them to support various development initiatives within the Cardano ecosystem.
Tesař proposed utilizing the treasury funds to launch additional Catalyst Funds, provide liquidity in decentralized finance (DeFi) projects, accelerate scalability technologies, support the deployment of stablecoins like USDC and USDT on Cardano, and invest in marketing efforts. He believes that redirecting the treasury assets towards these purposes would better serve the long-term growth and sustainability of the Cardano network.
While the burning of treasury tokens remains a topic of debate within the Cardano community, Hoskinson’s stance against such actions emphasizes the importance of considering the implications for all stakeholders involved. As Cardano continues to evolve and solidify its governance framework, decisions regarding the use of treasury funds will play a pivotal role in shaping the network’s future trajectory. By weighing the perspectives of various community members and stakeholders, Cardano can navigate the complexities of governance and resource allocation effectively.
