A heated debate has broken out inside Cardano’s community over a proposal to allocate 50 million ADA to build stablecoin liquidity and expand the DeFi ecosystem.
Supporters argue the fund could strengthen adoption, but deep disagreements surfaced over who should control treasury spending and how decisions should be made.
One prominent Cardano supporter, , pushed for cautious, staged allocations, arguing that funding one protocol at a time would prevent dilution and make results measurable.
They further opposed the idea of forming an unelected advisory board, instead favoring direct community votes on fund allocations.
Cardano founder Charles Hoskinson pushed back strongly on these suggestions, warning that direct democracy over treasury decisions would turn chaotic.
Drawing from past experience, he described Cardano’s earlier budget process as messy, contradictory, and often unworkable.
According to Hoskinson, giving every decision to the community would risk turning DeFi development into a popularity contest, preventing serious projects from participating.
Hoskinson instead pointed out the need for delegated authority, where experienced individuals or groups are entrusted with decision-making powers but remain accountable and replaceable. He argued that without such structure, Cardano would struggle to scale adoption, marketing, and DeFi initiatives.
Not all community members were convinced. Some pointed to flaws in past governance processes, particularly issues within the structure, and suggested that failures were not due to community shortcomings but rather leadership gaps.
Others highlighted that equitable voting models, whether through one person, one vote, or weight based on ADA holdings, should remain central to Cardano’s identity, even if imperfect. Jane acknowledged direct democracy can be messy, it offers fairness and inclusivity.
Critics of delegated models remained concerned about entrusting unelected or pseudonymous individuals with major financial decisions, particularly when their track records in both traditional and DeFi remain unproven.
The discussion showcases an ongoing tension within Cardano as the protocol aims to balance the ideals of decentralization with the practical need for efficient governance.
Hoskinson stated that even well-resourced individuals struggle under current structures, raising doubts about whether smaller players can meaningfully influence outcomes.
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