Cardano Foundation FAQ

English News and Announcements
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Our Catalyst participation has resurfaced some more miscellaneous questions about the Cardano Foundation and its role. We have collected the most recurrent questions on X and provide here summary answers and clarifications.

1. Why was the Cardano Foundation founded?

Founded in 2016, the Cardano Foundation is an independent, Swiss-based not-for-profit organization tasked with advancing Cardano as a public digital infrastructure across a wide range of industries.

2. Why do you do what you do?

We have 100+ employees working with institutions, businesses, regulators, and policymakers to solve societal and enterprise challenges in new ways across 25 countries. Our ultimate goal is to ensure the success of the Cardano ecosystem and its ability to be economically self-sufficient. This requires a more diversified adoption. We have a legal duty to use our resources for the achievement of our statutory purpose, copied below for ease of reference:

“The Foundation’s mission is to promote developments for new technologies as well as applications, primarily within new, open and decentralised software architectures. It is the aim that decentralised and open technologies will be developed, nurtured, promoted and maintained. A focus dominates the promotion of the development of the Cardano Protocol and the relevant technology for it in addition to the promotion and support of applications using the technology or the Protocol.”

3. Why can’t the community elect the Board of the Cardano Foundation?

A Swiss foundation is not a membership-based organization and does not foresee the election of its board by a community of members. The foundation model is the legal form that was chosen in 2016 when the Cardano Foundation was set up. If the goal was to create a membership-based model, the legal form of a Swiss association, such as we used for PRAGMA, would have been a more suitable choice.

4. What do you do for the Cardano Community?

The Cardano Community is a valuable stakeholder of our organization. Collaboration, decentralization and fair amplification are critical to the work that we do. In our 2023 report, we’ve outlined our contributions to the Cardano Community, more specifically:

  • Develop and maintain relationships with all CEX (centralised exchanges), optimize their integration with Cardano, offering continuous technical support, including keeping them informed and up to date about on-chain events.
  • Maintenance and continued development of various critical pieces of critical Cardano tooling (e.g. Cardano Wallet, Cardano Rosetta, Cardano GraphQL, Ogmios, Kupo, the Token Metadata Registry, Aiken).
  • Collaboration with various projects in the ecosystem for e.g. the creation of Aiken developer courses and the annual State Of The Cardano Developer Ecosystem survey.
  • Administer and defend the Cardano trademarks from copycats and the most egregious forms of fraud (e.g. takedown of over 200 scam youtube channels, dozens of websites, opposition of over 30 trademark registrations in 23 jurisdictions). Thanks to this work, we maintain the highly ranked recognizable branding of Cardano (#26 in Link). As a not-for-profit organization, we can ensure that no commercial interests or individual participants take over, dominate or distort the brand, while empowering the Cardano community to use the brand under our trademark policies and licensing agreements.
  • We administer and fund the Cardano Ambassador Program, established in 2018, to empower passionate community members to drive adoption, educate, foster decentralization, and amplify the global community.
  • We provide various platforms that are accessible to the community regardless of their origin or any memberships. This includes the open-source websites cardano.org, developers.cardano.org, forum.cardano.org, and cips.cardano.org, as well as socials via our community accounts and roundtable formats on X, YouTube, and Linkedin.

5. Why are you so unaccountable and intransparent?

Accountability and transparency are as important to us as they are to you. Over the past few years, we have put considerable effort into improving this, such as publishing the Activity Report, the Financial Insights Report, our balance sheet on the blockchain, public SPO delegations and associated methodology, and building (almost) all our code in open source. We want to build the Cardano ecosystem together in the open, and we would encourage the same level of accountability and transparency from other organizations across the ecosystem.

6. Why don’t you give out grants?

The blockchain industry at large does not have a very convincing track record on return on investments in the grants space and in the past, we did not believe our resources were best applied to this space. We are however committed to enhancing the funding landscape on Cardano, which is why we actively participate in Project Catalyst and Intersect. For individuals and teams that have an existing product with a measurable on-chain footprint, especially in the enterprise adoption space, please feel free to reach out to us about collaborating on implementation, open source or otherwise.

7. Why do you insist on sometimes forging your own path on topics like governance?

While we believe in productive collaboration, we believe even more in the permissionless participatory nature of this ecosystem. We participated (Amsterdam, Dubai, Geneva, Berlin 2, Lisbon, and Buenos Aires) and organised (Berlin 1, Vienna, and Taiwan) constitutional workshops. We felt that their format made significant textual changes very challenging. Also, in numerous discussions with delegates and workshop participants, we noticed that many implications of the proposed text were unclear in significant ways.

We are convinced that the Constitution should not just be a handbook for the Constitutional Committee but a beacon that attracts new people to Cardano and explains Cardano Governance to enterprises, regulators and policymakers. Hence, our decision to publish our Constitution Proposal and its five translations:

8. Why were you so late in releasing your Constitution Proposal?

We were indeed delayed more than we would have wanted. Getting clarity on many of the intricate interactions between CIP1694, its actual on-chain implementation, the parameters and guardrails and more, and then working with the legal team took more time than anticipated.

9. Why do you think you should get to vote with the ada you own?

The Cardano community has adopted a governance model that is evident in all constitution proposals, including the Intersect constitution draft, which is based on “one lovelace, one vote.” As the only not-for-profit actor whose entire statutory purpose is the success of Cardano, we believe it is our responsibility to be a constructive participant in the Cardano governance ecosystem. Neglecting this role would mean failing to fulfill our statutory purpose.

10. Will you be voting for the Intersect constitution draft?

We have always emphasised the distinction between the ceremony in Argentina and the on-chain ratification because there were and still are many misconceptions about this in the Community and even among the delegates. Nevertheless, we respect the community decision and will support it.

We will be voting for the Intersect constitution that was signed in Argentina and Kenya with the ada we are delegated by the Community (drep1ydpfkyjxzeqvalf6fgvj7lznrk8kcmfnvy9hyl6gr6ez6wgsjaelx).

The Cardano Foundation will continue to be part of the evolution and improvement of the constitution and we look forward to the process.

11. Will you be voting for the Cardano Budget(s)?

That will depend on what is in them and whether we believe the budget requests are reasonably sized and sufficient delivery safeguards are in place. We will speak more about this publicly once the draft Cardano Budget(s) have been published, and we will, of course, use Our Cardano as our guiding mechanism in any decisions we take.

12. Why didn’t you join Intersect in 2023?

At the time, we were asked to pay an eight-figure amount to join and receive a guaranteed board seat for a fixed period. When we asked for details on what the funds would be used for, what the fiduciary setup would be, and who would be in control, we did not receive sufficient actionable answers (until 2024, see below). With this information as our only basis for decision making, we declined to join until we received further clarity.

13. Why did you join Intersect in 2024?

In the summer of 2024, we received satisfactory answers to our questions from 2023 and with community voting for board seats implemented, we felt comfortable enough to join as an ordinary enterprise member.

14. Is PRAGMA a competition for Intersect?

PRAGMA is a complementary effort. The mission of Intersect is much broader than PRAGMA’s. PRAGMA focuses solely on open-source software development, whereas Intersect strives to be Cardano’s orchestration entity. PRAGMA has started small and is figuring out the most efficient way to work on an initially limited number of projects, currently being Aiken and Amaru. We hope to open up membership in 2025. In the long run, we hope PRAGMA and Intersect can work hand-in-hand to deliver for the Cardano ecosystem.

15. Do you dislike IOG? What about the people working there?

We respect everything IOG, under the guidance of Charles Hoskinson, has built with Cardano and the talents they have under their employment that accomplished it. Their work and vision for Cardano is the very reason many of us are in this space. We are sometimes frustrated by their actions and choices. But given the complexity of making Cardano a long-term success, it is to be expected that we will disagree on how this could be accomplished. We continue to be open to a constructive exchange of ideas where all parties feel heard and respected.

16. Do you dislike Intersect? What about the people working there?

No. Even before officially joining Intersect as an enterprise member, many members of the Cardano Foundation team actively contributed to various working groups/committees and continue to do so today.

Cardano needs a governance orchestration organisation and Intersect has the legal structure to make that work. We have always maintained that Intersect’s scope is difficult and ambitious to achieve and this at times, can pose a significant challenge to our working relationship. The organisational complexity and challenges of Intersect should also not become the single point of failure for distributions from the Cardano treasury. Having said that, we feel that these are solvable challenges that we are working on with Intersect to address.

17. Have you “poached” talent from IOG?

No. We do have the pleasure of working with some extremely talented folks who have also worked for IOG in the past. In such cases, the people in question decided they wanted to make a change, which we believe should be anyone’s right. We stand by the belief that the free movement of talent within the Cardano ecosystem is critical for its long-term success.

18. Did you run the voucher sale for ada? Are you in charge of the unclaimed ada redemptions?

The Cardano Foundation did not run the voucher sale for ADA, and we are not in charge of the unclaimed ADA redemptions. The Cardano Foundation did assurance work regarding KYC procedures, on the sale but was never and is not involved in the ada redemption process.

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Thanks for the open and honest post.:pray:

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It is interesting how that question was worded because that is not the real question. Of course CF employees should be able to direct the voting of CF held Ada. But these employees should do so in compliance with the CF mission and the duty CF owes to the Cardano community.

Thus, the real question is:

Should CF employees vote CF held Ada in order to override community consensus under circumstances where a case has not been made for why it is necessary to override community consensus on a particular issue?

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Charles Hoskinson responded to this Forum post in a twitter space today.

Here is a quote from his response:

In the forum post that the foundation (CF) posted today they said: Well we were established in 2016 in Switzerland. Well who did that? It was Michael Parsons who did that, who was deposed for trying to embezzle funds from the Cardano Foundation. Only after the community came together with the Guardians of Cardano and people actually made a statement about it and Parsons decided to go.

Well what happened next? That wasn’t address in their forum post.

Input Output and Emurgo got together and we were the majority of the board. We came in for a period of time, Tam Hasson, Niko Aquillos, Mahmeet Sing where board members. And they said, you know, Switzerland is not fit for purpose for a members based organisation; Which was always the intent of the Cardano Foundation. Anyone tells you otherwise is lying. It was always the intent that this (CF) be a community owned, operated, and controlled organisation.

So we tried to move it (CF). And when we tried to move it, the administrator was appointed by the Swiss Government, and they liquidated the board. They got rid of all of our people and they put in 4 people who have no connection to the Cardano ecosystem.

And they said in their forum post today that they have no intention of allowing people to be voted in because that is not allowed under the structure of Switzerland. Well no shit Sherlock, we are aware of that. So why not simply move the foundation to another location? They seem to be enamored with the Middle-East. They have the DLT foundation laws in Abu Dahbi which would allow them to be members based. We have already shown how to do that with an organisation in Wyoming. They can certainly move anywhere in the world and move the assets, and start over and have a members based organisation. They (CF) choose not to do this.

Then later in the twitter space he said:

For 10 years I have been telling people again, and again, and again: Cardano is going to be a decentralised protocol led by the bottom up. Led by the community as a whole. 10 years I have been saying this. That is the intent. That is the goal. Watch my TED talk in 2014. And, I have been very consistent throughout this entire process. I believe in all of you. I believe all of you have the right to lead. And I believe the time is now for you to lead.

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Nice @Terminada :pray:

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This twitter (X) parody post is well worth reading. It illustrates many reasons why community members believe CF is not fulfilling its duty to act in the best interests of the Cardano community.

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That was interesting @Terminada :wink:

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Overall, as a crucial pillar of the ecosystem, the Cardano Foundation plays a key role in promoting technological development and community building. While there is room for improvement in terms of governance models and transparency, its overall development direction is positive. In particular, community incentive mechanisms like the Ambassador Program, if further refined in terms of details and implementation plans, will better promote the development of the ecosystem.

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Agree. If the leading committee of the CF cannot be elected by the whole Cardano community according to the Switzerland law, why don’t we (CF) just move to another country with all assets where the election of the CF leading committee would be allowed by law?

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CF CEO Frederik Gregaard responded to Charles Hoskinson’s statements about how the CF board was elected in this twitter space and his response provides a bit more colour:

Specifically, Hosky asked a question at 49:10 about what influence the Swiss Govt had in the election of the current CF board? Frederik Gregaard’s response might be summarised as follows:

The previous CF board had become somewhat dysfunctional. Consequently the Swiss Foundation Supervisor brought in an external law firm “to guide CF back into calmer waters” in January 2021. It was the duty of the Govt Supervisor to do this under Swiss law.

The law firm facilitated the process for the selection of a completely new board. The selection process was conducted by a head hunting firm and they also conducted interviews with the outgoing board members, as well as with Charles Hoskinson personally. First a new president of the board was elected unanimously, including by the IOG board representative. Then another 2 board members were elected, again unanimously, with 1 abstention for 1 new member. The previous board, including the IOG representative then voluntarily resigned. Then finally a fourth board member was added. All these steps were duly documented and signed including by the previous board members.

So it is definitely not true that the Swiss state elected board members. That is not how it works and that is not how it is done.

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Well, things just get more interesting.

This is the latest explanation of the history from Charles Hoskinson and is a rebuttal of some of the colour that Frederik Gregaard provided.

I don’t agree with Charles when he says that nothing can be done by the community if CF officeholders choose to vote the CF held Ada however these individual officeholders should please.

CF is not a private company and in contrast to a private company the CF officeholders owe a duty to the Cardano community. There can be severe consequences for officeholders that don’t properly comply with their various duties and poor decisions can be overturned through legal challenges. We also have on-chain governance now, so the community can use this governance mechanism and social pressure to make it clear to CF officeholders what things the community values and how the community expects CF officeholders should act.

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Thank you for always being so resourceful man @Terminada

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He only seems to half-understand it and, of course – everybody is the hero in their own story, he paints his view of it as objective fact. Always his style. I can’t stand it. Makes me puke. (And that so many buy this style and admire him for it is just exasperating.)

Yes, he is right, if he already had the plan of a “members-based organisation” back then, then his choice of a foundation as structure for that was phenomenally bad. No, the idea to “just” move it to another jurisdiction was never good, never possible.

Foundations according to Swiss (and also German) law are made for eternity. They can’t be terminated at will and moved elsewhere. Not even the founder can. (And in this case, it is not even clear who that founder really is and who can represent them.)

And that the supervisory authority (not “the government”) stepped in when they tried it, could have been kind of obvious. He performs the “mental Jiu-Jitsu” he accuses others of right in front of our eyes, first describing in detail how the current board was selected by the previous one – including the members from IOG – and then claiming again that this obviously means that “the Swiss government appointed the board”. Is it to trigger the hate of the crypto community towards their simplistic imagination of “evil governments”?

That foundations cannot be terminated and modified at will is usually a good thing. And even if it may not have been his intent (gotta take his word for it), it also seems to be a good thing for Cardano to have an independent, not-for-profit institution forming their own opinion and acting on it.

Factually false:

https://forum.cardano.org/t/understanding-the-internal-governance-of-the-cardano-foundation-purpose-statuten/140926#p-363718-art-2-purpose-5

That’s the purpose they have to fulfil. And only that.

Again, usually a good thing. If a foundation is founded to support the arts, an association of artists cannot organise and claim that they are doing it wrong and force them to do it differently. If a foundation is founded to support homeopathy, the scientific community cannot organise, claim that that is utter bs (although they would be totally correct in this case) and force them to stop.

Yes, you can sue them if you feel what they are doing is illegal. Have fun with that. sigh

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If Cardano is even half successful in its mission to be the basis of the financial operating system of the world then a lot more money will be at “stake” in the future. Furthermore, with on-chain governance and better developed technology it will be increasingly transparent what is the community consensus on particular topics. If CF officeholders should decide to belligerently act with their own free will as you suggest they are free to do, and if these acts conflict with community consensus (IE: CF officeholders ignore their duty to act in the best interests of the community), then yes, some people might seek legal redress.

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This post was really insightful
Thanks for sharing

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