Marketing Doesn't Fix a Broken Governance

Governance General Governance Conversation
1

We need to come to terms with a simple fact: platforms are built by investors who take the risk and professionals who know how to build the best system. The most the rest of us can hope for is an ethical, visionary leader who prioritizes long-term success over short-term personal gain. Cardano was fortunate enough to have all three — investors, builders, and an uncompromisingly visionary leader — and the result is the best platform in the industry by far. There is no reason to believe that once the platform is in place, this formula should suddenly change when it comes to adoption.

Catalyst was a good experiment, but by all accounts a failed one. There is no evidence that it contributed meaningfully to adoption. Platform maintenance and improvement continue to be done by the professionals who built Cardano in the first place. The DRep system, meanwhile, is an unmitigated disaster: it handed individuals power without accountability — power granted not for expertise, but for an impressive personality.

Whether we see Cardano as a business or as a decentralized ecosystem, the Cardano Foundation is an anomaly that works like a cancer within it. Bureaucrats with no stake in the platform’s success or failure hold enormous power without accountability. This offends the very logic Cardano is built on. Cardano is a stake-based system: its security, its consensus, its entire design rests on the principle that influence must be backed by stake. The investors risked their capital; the builders staked their reputations. Handing power to people with no stake in the outcome goes against the nature of the system itself. Let me be clear: this is not about the individuals serving at CF. It is about the organization itself, as a system. That kind of organization should not exist in a decentralized ecosystem.

CF’s acquisition of Catalyst is the clearest evidence of this anomaly. I am sure the people at CF are doing their best with the power they have acquired. But power is addictive. If they were true to the ethos of decentralization, they would be cutting CF’s power back. Instead, they are consolidating it — expanding CF’s operations and influence, even taking over the failed Catalyst experiment, which hands them still more resources to buy still more influence. They can’t help it. No one in their position can resist it. That is what unchecked power does — just ask Sméagol what carrying the Ring did to him. This is not a problem with the individuals at CF. It is a governance system problem. And to be honest, I do not see how it can be solved now, except by forking Cardano.

The recent calls for a marketing blitz, and Charles’s attempts to energize the base, did not land with me the way they once did. Even those cheering him on sound less convinced than they used to. Something is broken. If we are too afraid to say so for fear of rocking the boat, nothing will change. And if forking Cardano is what it takes to save it from failure, then it has to be done.

3 Likes
Digest July 8, 2026: Genesis Hacker House Applications Open For Cardano Builders State of Cardano Governance Report Now Available RealFi Phase 1 Testnet is Live Cardano Improvement Proposals (CIP) Updates Spotlight on Crypto Dossier & Linda
Resumé du 8 juillet 2026 : Candidatures ouvertes pour Genesis Hacker House (développeurs Cardano) ; Rapport sur l’état de la gouvernance de Cardano disponible ;
2

I love your posts and wanted to make a real quick comment about one thing before reading it in its entirety.

To say, “Catalyst was a good experiment, but by all accounts a failed one. There is no evidence that it contributed meaningfully to adoption.”, is perhaps misguided and highlights one of the most widely accepted ideals despite being wrong.

Catalyst had many purposes but one of the most important goals of Catalyst was to get the treasury out of the hands of the founding entities, and that has been accomplished. This was the intended outcome of the Challenge Setting Category. While it may not have been the ideal path, the goal was accomplished.

Many things were learned, many friends were made, businesses began and are still going. I hope we all can keep that in mind when discussing Catalyst and realize that it was a success full of many successes and many many more failures.

Much love,
Quasar

1 Like
3

Thank you for the reply — it’s a fair challenge, and it deserves a direct answer.

I have to dispute the premise, though. As I understand it, Catalyst was never meant to replace the founding entities. It was meant to be a platform that invested in people building adoption, and building for the platform, independently — so that the development ecosystem would expand beyond the founding entities. That is a very different ambition from replacing them.

Measured against that ambition, the results speak for themselves: adoption is nonexistent, the contribution to the platform has been marginal, and behind them stands a multitude of abandoned and shelved projects.

And here I’ll concede your point: as an experiment, Catalyst succeeded — it showed us what doesn’t work. What it showed is this: a professional class cannot be minted by grant. It has to be built the way every profession is built — by following in the footsteps of predecessors, or by building a compelling, disruptive product of one’s own. Catalyst offered a third path that doesn’t exist.

Even if replacing the founding entities had been the intention, it would have been the wrong move — with one exception. Emurgo provided the investors; IOHK provided the expertise. Each contributed something the platform could not exist without. CF contributed nothing, except introducing corruption into the platform.

What was actually missing from governance, in my view, was the users. Catalyst was supposed to bring them in, by investing in the people who build for users. The investment was made — the results never came. Had the same investment been placed with the professionals who built the platform itself, the user-facing tools would exist today.

Charles and the other founders, in their attempt to be seen as democratic, abandoned their responsibility — and created a vacuum that, frankly, no one has been able to fill. The users remain the missing variable in the governance equation.

Charles did try to build for users, with his own money, through government partnerships. He failed. But it was his own money — his risk, his choice, his loss. Had it been done with treasury funds, there would have been an obligation to build for the people. That is the difference accountability makes.

2 Likes
4

Not really. But the Genesis investors are probably okay enough with the profits they made.

5

The accountability argument is compelling.

The real question is: how do you preserve decentralization while ensuring decisions are made by people with the right incentives and expertise?

I think the bigger issue isn’t whether power belongs to investors, builders, or institutions it’s whether incentives are aligned with long term value creation at this point

2 Likes
6

Thank you — you’ve put your finger on exactly the right question. Here is my answer: the incentive alignment you’re looking for already exists on two sides of the equation. The investors have capital at risk; the builders have their expertise and reputations invested. Both are structurally aligned with long-term value creation, because they only win if the platform wins.

What’s missing is the third side: the users. Users are the signal. They are how investors and builders learn what to build and whether it is working. Right now, that signal is absent.

And to be precise, I do not mean institutional users. Institutions — particularly centralized ones — are not natural customers of a decentralized ecosystem. They will only come to it when their own people pull them in.

Take Petrobras, which employs some 45,000 people and has been engaging with Cardano. Petrobras adopting Cardano as an institution would bring no lasting benefit to the ecosystem — because Petrobras’s natural incentive is to build its own private sidechain, avoid the L1 entirely, and take its workforce with it behind the wall. But reverse the order. If the workforce and its grassroots organizations and unions adopt Cardano first — before the institution encloses them in a private chain — then Petrobras is compelled to meet its workers where they are: on the L1.

For that to happen, the treasury would have to invest in the tools and infrastructure that workers can actually use. Instead, the ecosystem’s leadership prioritizes Petrobras, UNICEF, and the like. And I understand why: institutional names bring prestige to the leadership. But prestige is the leadership’s incentive — not the platform’s. Which brings us right back to your question about alignment.

2 Likes
7

Hello @T_Tefera

I’m not sure I understand your complaint here. What power?

CF is not in charge of Cardano treasury and they have no direct access to it.
CF has no say in protocol infrastructure, intersect is in charge of that.
Only thing CF has is funding that was willingly donated to them by 3 founding entities when they created CF to take over from now defunct founding CF-IoM.

CF is just a stable point that regulators, states and enterprises can connect with.

1 Like
8

Boring hate on the Cardano Foundation, probably informed by Hoskinsons’s delusional YouTube rants. :woman_shrugging:

His fan girls are really annoying.

2 Likes
9

@Neo_Spank
The ADA holdings alone give CF significant influence within a stake-based system — that is power by Cardano’s own definition. But the deeper concern is structural, not current.

A centralized institution with a stable funding base, an official-looking mandate, and a public-facing role has every tool it needs to accumulate real political influence: buying supporters, aligning with sympathetic governments, positioning itself as the authoritative voice of Cardano to the outside world. Notice also what happens when this is pointed out: the response is not a counter-argument but an insult — “boring hate,” “delusional,” “fangirls.” That is what captured space looks like when it is defended. I am not criticizing the person who wrote it. I am pointing out that when structural critique is met with personal dismissal, it usually means the structure cannot be defended on its merits.

And that is exactly the problem. Right now we are banking on the goodwill of the people inside CF. That is not a governance design — it is a hope. A decentralized ecosystem cannot be secured by the virtue of its centralized institutions.

What should CF be? A dummy front. A letterhead. A point of contact for regulators, states, and enterprises that need a legal entity to talk to. It should have no active role within the decentralized ecosystem itself — no position in arguments, no role as judge or jury, no influence over direction. The people making those decisions are not ADA holders. They are not builders whose reputations are staked on the outcome. Employing builders is not the same as being one, and it was never in CF’s job description. That is how institutional power expands: first by proximity, then by presence, then by precedent.

Even if CF brought nothing but the best intentions and the best people, the design is still broken. A centralized body that wields influence inside a decentralized system corrupts the system — not through malice, but through structure. The creation of such an organization was a mistake. The honest question now is whether it is a correctable one.

10

Literally what they were designed to do.

It’s an open platform. ANY centralized or decentralized body can use Cardano whenever they want (and they are all welcome to use it).

CF is an ₳ holder. You may have issues about how or when or from whom they got that ₳ or who they put incharge of it, but it doesn’t change the fact that same rights of any ₳ holders should also be extended to them.

Strongly disagree. However, you may be one of Cardano people that prefers a leader and not decentralized groups. I can see how that point of view may look enticing.

As for power through ₳ … if we don’t allow EVERY ₳ holder the same rights, then there is no point of any of this. Just clone the network and make it private.

Holding ₳ doesn’t give any of us a right to say what happens to CF or IOG or Emurgo. ₳ are not “shares” in Cardano.

The way I look at it: Cardano is like a city and ₳ is electricity that powers that city. All Cardano citizens can have ₳ and use it for what they want, but they can’t use others ₳.

1 Like
11

I’ve been following this thread and wanted to jump in..
This is a fascinating discussion. I think we can all agree that there is a significant gap between the “original intent” of a system (like Catalyst) and the “real-world outcomes” we’re seeing.
To me, this debate isn’t just about whether Catalyst was a success or a failure, but rather about how we define and enforce accountability moving forward. If we agree that the current system suffers from transparency or bureaucratic issues, what concrete steps do you think the community could take to ensure that the influence of DReps or the CF is tied more directly to “stake” and measurable results, rather than just popularity?

1 Like
12

The way I would see it, the far worse centralisation in Cardano is the one around Hoskinson and his companies. Followed by Emurgo having been quite useless for years, then suddenly waking up, reviving their mediocre wallet app and acquiring huge amounts of voting power from people who supposedly don’t know any better than delegating to the standard choice of the only wallet app they know.

CF has been the only half decent of the founding entities in my view and I really find it ridiculous how much hate they get from Hoskinson simps.

I also didn’t have the impression that it was an “acquisition” of Catalyst. Rather, something must have gone wrong rather horribly inside IOG. Calling off an already started fund is pretty unheard of.

And then they found a useful idiot in the CF to take over the ruin because some in the community believe that Catalyst was somehow valuable and not the huge value extraction scheme (funding a handful of actually useful projects and a huge collection of utter bullshit, including the useless “community reviewers”) that it has always been.

Let’s see if CF manages to make some of the changes that the IOG Catalyst team has procrastinated for years. If not, dReps can still decide to defund it.

If they do. If they don’t, well, that’s wealth oligarchy at work for you. But it’s fair. Although ADA are not “shares” in Cardano, they are the only possible proxy for determining voting rights that we have, for deciding how much “skin in the game” somebody has.

13

I am glad @HeptaSean and I at least agree on one thing: Catalyst has failed as an adoption engine. That is an important common starting point.

Where I differ is on the conclusion.

In my view, the governance problem is largely Charles’s own making. This is not his first institutional design failure either. Ethereum’s foundation model was also partly shaped by him, and Cardano has inherited a different version of the same problem: a centralized institutional actor gaining structural influence inside a system that claims to be decentralized.

That said, I do not think it makes logical sense to argue that CF has a better standing in Cardano than IOG or Emurgo simply because CF appears more neutral or institutionally polished.

The leaders and owners of IOG and Emurgo have direct personal stake in Cardano’s success. Their wealth, reputation, and future opportunities are tied to whether Cardano succeeds or fails. Charles in particular has a double incentive: he is both a major builder of the platform and one of the most visible ADA holders. His reputation and material interest are tied to Cardano’s outcome.

CF leadership does not have the same incentive structure. CF as an institution may hold ADA and occupy an official-looking position, but the people directing it are not personally tied to Cardano’s success in the same way as founders, builders, long-term developers, SPOs, DApp builders, or ADA holders. They also do not have the same track record of building the world-class platform that Cardano actually is.

So the comparison is not between perfect actors and bad actors. It is between different incentive structures.

IOG and Emurgo may have flaws. Charles may have made serious governance mistakes. But their incentives are still tied to Cardano’s success. CF’s incentive structure is more bureaucratic and institutional. Its power can grow even when adoption does not. Its legitimacy can grow through process, branding, access, and official appearance, rather than through delivery.

That is the governance danger I am pointing to.

I also do not believe that actors who have gained influence through Cardano’s governance design flaws will be persuaded to surrender that influence by appeals to conscience. Power rarely gives itself up voluntarily. Once an organization has accumulated influence, there must be a stronger incentive to give it back. I do not see such an incentive inside Cardano’s current governance design.

This is why I think the problem may eventually become existential.

Those with real stake in the ecosystem — builders, ADA holders, SPOs, developers, businesses, and users — may eventually realize that they have no effective way to correct the incentive structure from within. If governance power continues to drift toward actors who do not carry the same risk, responsibility, or delivery record, then forking the platform may become the only rational option left.

I am not saying that is desirable. I am saying that governance designs create incentives, and incentives eventually produce outcomes.

A fork is not caused by disagreement; it is caused when the system gives stakeholders no credible path to correction.

14

How do you reach this conclusion?

CF’s entire statutory mission is centered around making Cardano a success. That is literally, not figuratively, THE job. Most of the people that work for CF could be earning more in a for-profit environment, but they chose not to because they believe in that mission. And to be clear, that is how it should be, we are a not-for profit and shouldn’t be paying more than the private sector.

On top of that CF as an organisation is heavily exposed to ADA, in all likelihood more heavily than Emurgo or IO, although nobody can say for certain, given CF is the only one of the three that publishes any financial information. Or put differently, if ADA drops, it has a direct impact on resource availability. We also pay certain compensation components in ADA.

So overall, this seems like an unsupported contention on your part.

5 Likes
15

@CF_CLO
I think your reply misses my point.

My argument is not about whether people at CF are sincere or mission-driven. I accept that many are. The issue is institutional incentives, not personal morality.

IOG and Emurgo are private companies, so they do not have the same obligation to publish financial information. CF publishes because its legal structure requires it. That does not by itself prove better alignment.

The real question is accountability.

CF may hold ADA and have Cardano in its statutory mission, but institutional exposure is not the same as personal risk. If CF makes poor strategic or political decisions, the direct cost is mainly carried by ADA holders, builders, SPOs, businesses, and users.

This is why the repeated push against Charles is a good example of the problem.

Whether people like Charles or not, pushing him away is harmful to the platform. He is the owner of the main development company behind Cardano and one of the largest ADA holders. His wealth, reputation, and legacy are directly tied to Cardano’s success or failure. That gives him a level of accountability CF leadership does not have in the same way.

In fact, part of Cardano’s governance problem comes from Charles stepping back too far and leaving a vacuum. That vacuum has been filled by committees, institutions, personalities, and process politics.

Charles should not be unchecked. No one should be unchecked. But trying to delegitimize or push away the most accountable builder-stakeholder is not decentralization. It is irrisponsible and only strengthens institutional actors whose influence comes from position, funding, branding, and access rather than delivery and personal stake.

My concern is that CF can become a kingmaker: choosing winners and losers through institutional preference, proximity, networks, and narrative control. That can happen even with good people and good intentions. Catalyst showed this pattern already, and there is no mechanism that guarantees it will not happen again.

Good people inside a bad incentive structure can still produce bad governance outcomes.

So my point is simple: CF’s role must be bounded, (the best outcome is to eliminate it if possible) and Charles’s role should not be treated as illegitimate. Cardano needs a constitutional balance between stake, delivery, accountability, and user adoption — not the replacement of accountable builders by institutional power.

16

Disagree wholeheartedly. The only way for Cardano to ever come out of the hole is to become independent of this horrible and incompetent person.

17

Your whole point is inconsequential.

Because of the legendary “We are just paid developers!!!” intransparency of Hoskinson’s web of private companies, we actually do not know how much is still at stake for him.

Personally, I would only start buying bison herds and attack helicopters after I’d have extracted enough value to never have to worry again.

In the foundation, on the other hand, a lot of people (who have not made enough money from this to play around with private helicopters) have their jobs on the line if Cardano fails even more than it already did.

In my book, that is much more accountable than a “founder” who seemingly already extracted enough personal wealth, who has an uncritical, devout followership, and who can change direction of the whole ecosystem by throwing a tantrum on YouTube.

18

This seems personal, so I will stop here.

19

On the one hand, it is personal. That horrible person has attacked me personally often enough.

On the other hand, I have addressed your in my view completely misguided idea of who in this game is accountable and who is not.

20

Ah ha! You trickster, you fudster. There’s no such thing as “boring hate on the Cardano Foundation”.