Following the Chang hard fork, the Cardano community is excited to have the ability to make decisions regarding ADA in the treasury. While some members suggest investing in marketing, it’s important to consider that our goal isn’t to spend the ADA from the treasury as quickly as possible. This resource could be invaluable in the future. Let’s be responsible.
We believe that Cardano should prioritize supporting activities with a long-term impact on the project, rather than short-term initiatives with uncertain outcomes. Let’s use the ADA from the treasury wisely to ensure sustainable growth and development. We should allocate only the minimum amount of ADA to marketing.
Do We Need Marketing Now?
ADA in the Cardano treasury is a valuable resource that we must manage responsibly. While there are frequent suggestions to increase marketing investments, we believe we should do so conservatively.
There are two extreme views on marketing. One is that good products don’t need marketing, and the other is that success is only achievable through marketing.
The first perspective assumes that if a product is the best on the market, word-of-mouth from satisfied users will naturally promote it. Therefore, additional marketing investments are unnecessary.
The second perspective acknowledges the high level of competition in the market, especially in the crypto industry, and argues that investing in marketing is essential to gain an edge. This approach focuses on attracting potential investors or users, similar to how politicians who invest more in marketing often win elections.
We lean more towards the first opinion.
Investing in marketing would likely have only a short-term impact. During a bull market, it’s expected that many new people will enter the space, and smart marketing could attract some of them to Cardano. From this perspective, it might seem like an opportune moment for marketing. However, history shows that during a bear market, the crypto industry experiences an outflow of users. The blockchain industry still lacks the utility to retain users despite the falling market value of coins.
Cardano, like most blockchains, is not yet ready for mass adoption. Perhaps Ethereum, with its developed L2 ecosystem, has more to offer. However, centralized networks running on servers and controlled by teams with admin keys are likely not suitable for mass adoption.
If we anticipate the next bear market to be similar, investing in marketing now could seem like an ill-spent investment and an unnecessary waste of the ADA treasury.
We should focus on marketing when Cardano is technologically more prepared for mass adoption, which will take several more years. In the meantime, we should allocate ADA from the treasury to activities that have a long-term impact on the project.
How to Better Use ADA In the Coming Years
Currently, it’s more important for Cardano to invest in building its ecosystem. This includes enhancing scalability, DeFi, ZK cryptography, and improving the user interface. Additionally, we need more liquidity, and many people prefer stablecoins like USDC and USDT.
The Chang hard fork has introduced not only on-chain governance but also ZK cryptography. This paves the way for building ZK rollups, privacy-focused L2s, and other scalable solutions based on ZK cryptography. Additionally, let’s not forget about Hydra, a channel-based solution similar to the Lightning Network, which offers many advantages, including the ability to use DeFi services.
The IOG team is expected to deliver Ouroboros Leios and Peras, which will enhance network throughput and speed up settlement times. Furthermore, they are developing the Partner Chain Framework, enabling the creation of networks similar to those in the Polkadot ecosystem.
Until these technologies are available to users, it doesn’t make sense to consider the mass adoption of Cardano. Let’s allocate ADA from the treasury for these activities and other initiatives related to building infrastructure and the DeFi ecosystem. In many cases, we can utilize Catalyst for this purpose.
If we create something valuable, users will come. If they stay, money will follow. A strong network effect will attract VC investors. The presence of users and projects backed by VC funds will generate additional value that people will talk about. Word-of-mouth promotion is free.
Some principles have remained effective for centuries. Scalability is a prerequisite for building a strong network effect. Until we address this current deficiency, investing in marketing is pointless.
Cardano is highly decentralized and boasts high security in the DeFi ecosystem. Additionally, it has a large community of supporters. If we maintain these features and add scalability, we can be one of the first blockchains on the market to offer this combination.
Although L2s are currently booming, they are starting to face some shortcomings and criticism. While L2s are suitable for certain use cases, they may not be ideal for others. For example, I believe that blockchain is more suitable than L2s for minting RWA tokens.
How To Do Good Marketing?
Should marketing focus on the Cardano brand or the services built on it? Some argue that marketing the Cardano brand is akin to marketing TCP/IP, which would be ineffective since people use platforms like Google, Facebook, X, and Amazon without understanding how the Internet works. From this perspective, marketing services seem more practical.
However, blockchain and TCP/IP differ significantly. Blockchain operates on a level similar to Google or Meta, utilizing the Internet for its functions. Cardano, as a decentralized platform for building services, stands out due to its decentralization, which is a feature not present in TCP/IP. Decentralization relies on the distribution of ADA coins.
Given this, marketing the Cardano brand and ADA coin makes sense, with a key message centered on decentralization.
That said, most people will use Cardano indirectly through wallets and DeFi applications. In the future, some services might operate on Cardano without users even realizing it. Therefore, marketing these services is also important.
Each team should have its own marketing budget and not automatically rely on ADA from the treasury.
The Polkadot project has shown us that brand marketing doesn’t always yield the desired results.
In the first half of 2024, Polkadot spent $37M on marketing. In January 2024, Polkadot was ranked 12th by market capitalization. It is now 15th. If we decided to invest $40M in marketing now, we would need approximately 110M ADA from the Cardano treasury. That’s roughly a third of the projected revenue for 2025.
Let’s learn from the mistakes of others. We cannot afford to spend such huge resources on marketing that may not have the desired effect on the project.
People in the crypto scene are generally aware of Cardano’s advantages, but these benefits are often overlooked or misunderstood.
Marketing often relies on simple, limited messages. However, Cardano requires a deeper understanding from people. I believe we, as an ecosystem, should emphasize decentralization and highlight its advantages in our marketing efforts.
Perhaps we should consider supporting quality content creators to achieve this.
Another issue is that the media has reported negatively about Cardano until recently, though this seems to be improving. I don’t believe marketing will solve this problem. What will truly help is showcasing tangible results—projects that are successfully operating in practice. This brings us back to the network effect, which is bolstered by the adoption of the project by businesses, banks, and governments.
On platform X, the best marketing for Cardano is a strong and loyal community. We can win many polls, and every positive article about Cardano gets numerous views and likes. Negative articles are filled with disagreeing comments, all thanks to the community’s efforts, which come at no cost. This approach works well. Let’s stick with it and focus on building bridges rather than burning them.
Cardano needs to better showcase its technology.
Introducing Hydra through playing DOOM was a brilliant idea, generating enthusiastic posts on social media during Rare Evo, and it was relatively inexpensive.
Cardano has more to offer. For instance, the police in Dubai have launched a pilot project using Cardano for criminal investigations. It works fine with the current Cardano scalability. We need to deliver similar projects and present them smartly.
Direct communication by the Cardano Foundation, IOG, and Emurgo with businesses, banks, and governments is more crucial to the project’s success than marketing. Cardano entities can help them to build great projects. Intersect has a few working groups. Let’s support these efforts more.
The founding entities are tasked with supporting the Cardano ecosystem. The Cardano Foundation owns the Cardano brand. They invest in the ecosystem, thereby conserving ADA in the treasury. While it’s important to commend these entities for their visible achievements, there are times when encouraging them to increase their activity is also necessary.
Conclusion
The expected income to the treasury in 2025 is 300M ADA. We could allocate roughly 10M ADA to marketing, with a maximum of 30M ADA. It’s crucial to select marketing strategies that ensure a measurable influx of new users, such as direct marketing. Given the limited income, we don’t have much room for error and must choose the best solution, ideally from several options.
In the medium term, Cardano’s key task will be building long-term value that people will discover, appreciate, and stay with.