Hi everyone,
I’m Nyxar.
My background isn’t in Cardano governance specifically. Most of my time is spent studying tokenomics, incentive systems, governance design, and value capture mechanisms across different crypto ecosystems.
Over the last few days/weeks I’ve been staring at Cardano’s economics for the past few week and I keep coming back to the same conclusion.
I think a lot of people are looking at the wrong problem.
Everyone talks about TVL. Cardano has a few hundred million in TVL, Ethereum has tens of billions, Solana has billions. Fine. The numbers are what they are.
But the more I think about it, the less I care about TVL.
The question I keep getting stuck on is much simpler:
Why does a successful application on Cardano create demand for ADA?
Not might create demand.
Not could create demand.
Actually create demand.
Because when I look at the ecosystem today, I don’t really see the answer.
You’ve got roughly 57% of the supply staked. People buy ADA, delegate it, collect rewards, and move on. That’s not necessarily a bad thing, but it does make me wonder where the incentive is to do anything beyond hold.
Even Charles touched on this when he asked why ADA holders aren’t using Cardano DeFi. That comment stuck with me because it gets right to the heart of the issue.
If the people already holding ADA aren’t finding enough reasons to use the ecosystem, what exactly is supposed to pull new users in?
Take a successful Cardano application.
Let’s say a DEX grows.
Let’s say an RWA platform grows.
Let’s say a lending protocol grows.
What happens next?
The application succeeds.
The protocol generates revenue.
Users transact.
Volume increases.
But where does ADA become essential in that process?
That’s the piece I keep struggling with.
The more I think about it, the more I feel like the real issue isn’t throughput, TVL, or even revenue.
It’s value capture.
A chain can generate millions in fees, but if successful applications don’t create unavoidable demand for the native asset, then the token sits one step removed from the economic activity happening around it.
Maybe the conversation shouldn’t be:
“How do we get more TVL?”
Maybe it should be:
“How do we make every successful application on Cardano strengthen ADA demand as a natural consequence of succeeding?”
One idea I’ve been turning over in my head is whether revenue generating protocols should have some form of ADA based economic commitment to the network.
For example:
If you’re operating a large protocol, should you be required to post ADA collateral?
Should part of protocol fees be settled in ADA?
Should some portion of ecosystem revenue flow back into ADA through buybacks, burns, staking rewards, or something similar?
I don’t know the right answer.
What I do know is that a healthy ecosystem probably shouldn’t rely on people buying ADA simply because they hope the price goes up.
There should be a direct connection between ecosystem success and ADA demand.
The reason I keep coming back to RWAs is because they bring real economic activity instead of purely speculative activity.
But even there, I don’t think “RWA adoption” is enough by itself.
If Cardano tokenizes billions of dollars worth of assets but none of that activity feeds back into ADA demand, then we’ve still got the same problem, just at a larger scale.
Maybe that’s the discussion worth having.
Not whether Cardano needs more TVL.
Not whether Leios increases throughput.
Not whether the next bull market fixes everything.
But whether the current incentive structure actually makes ADA necessary when applications succeed.
Because if the answer is no, then that’s where I’d start looking for solutions.
open to dialogue on any of this. probably missing something
about constraints the team faces. but the mechanism piece
feels like the core missing piece.