An Open Letter to the Cardano Community
On Governance, Incentives, and the Users Cardano Promised to Serve
Independent Researcher · Dihre-Iddir Research · Founding Member, Intersect · Member, Intersect Product Committee 2025–2026 · June 2026
A note on where this letter comes from
I want to be direct about who I am and what these observations are based on.
My engagement with Iddir mutual risk sharing networks predates my involvement in blockchain. But it was a deeper interest in decentralised governance — in whether technology could replicate and extend what communities had already built for themselves — that brought me to this ecosystem. I followed Ethereum’s development from its announcement. I encountered Charles Hoskinson’s ideas through his TED talk and have been part of the Cardano ecosystem since its earliest days. What drew me was not speculation. It was the governance thesis: that a blockchain could be designed to serve communities rather than extract from them.
My engagement with Cardano has been continuous and hands-on across every major phase of the project:
- — Participated in the Cardano incentivised testnet, one of the first cohort of node operators as the network proved its staking model.
- t** — Active in Catalyst since Fund 1 at inception, contributing to the ecosystem’s treasury governance experiment from the moment it launched.
- ** — Founding member of Intersect, part of the original group that established the member-based organisation built to steward Cardano’s open-source development and governance.
- — Ex-Member of the Intersect Product Committee, participating directly in the governance structures built around Cardano’s on-chain mechanisms.
- Ongoing — Independent researcher working on Dihre-Iddir, a mutual risk sharing protocol rooted in the Ethiopian Iddir tradition, built on Cardano’s infrastructure.
I raise this not to establish seniority but to be clear that what follows is not the reaction of an observer watching from outside. These observations come from someone who has been inside this ecosystem at the technical, governance, and institutional levels — across most of its existence — and who has watched the same structural problem assert itself at every phase.
I am also an independent researcher involved in the development of Dihre-Iddir, a blockchain-based mutual risk sharing protocol rooted in the Ethiopian Iddir tradition. Dihre-Iddir is not a project that arrived at Cardano from outside. It is a product of two converging foundations: a centuries-old Ethiopian institutional practice, and the research and development that Cardano itself has produced. Without the Iddir tradition there would be no community architecture to extend. Without Cardano’s eUTxO model, its offline transaction capability, and the governance philosophy Hoskinson has articulated over many years, there would be no substrate capable of carrying it. Dihre-Iddir exists at that intersection — and its viability depends on Cardano succeeding at what it promised.
I am raising these issues now because Hoskinson’s recent videos have called for new ideas and new strategies. I want the community to know that these are not new ideas. I have raised exactly these concerns — the governance incentive failure, the systematic deprioritisation of grassroots adoption, the structural tilt toward enterprise and government clients — for over a year on this forum and in the Intersect committee, and before that through Catalyst. That they are gaining traction now, in the context of a prominent founder’s call for change, rather than when first raised by a practitioner working directly with the affected communities, is itself a symptom of the problem this letter diagnoses.
What drew me to Cardano was not speculation. It was the governance thesis: that a blockchain could be designed to serve communities rather than extract from them. After years of continuous participation — from the incentivised testnet through Catalyst, through Intersect’s founding — that thesis remains undelivered. Not because it was wrong, but because the incentive mechanism was never built to honour it.
1. On blame and honest accounting
Charles Hoskinson has not departed. He has stepped back from social media to reflect, and has called explicitly for new ideas, new blood, and new strategies. That call deserves a substantive response, not a eulogy.
The governance failures now visible in the ecosystem cannot be attributed to any individual. Cardano’s governance experiment was undertaken with genuine ambition and genuine good faith. Hoskinson has been its most relentless advocate, its most visible critic, and its most honest diagnostician. Attributing to him the outcomes that the governance architecture itself produced is not analysis. It is displacement.
But to treat these failures as incidental — as temporary market conditions or the product of bad actors alone — would be equally indefensible. The evidence is structural. Tap Tools, JPEG Store, and others who have left or are leaving were not killed by a bear market alone. They were operating in an ecosystem whose governance mechanisms were unable to direct resources toward the infrastructure that builders needed. That failure has a design explanation. It deserves a design response.
Blaming any individual is displacement. Ignoring the structural failure is complacency. Neither serves the community that remains.
2. What I observed inside the Intersect structure
The entire structure of the Intersect process — its agenda, its evaluation criteria, its assumptions about what constitutes a credible proposal, its understanding of who Cardano’s users are — was oriented toward enterprise and government adoption. Not through explicit decision. Not through anyone’s bad intention. Through the logic of the incentive mechanism itself: the people in the room were professionals whose careers, reputations, and financial interests were bound up in Cardano’s success as a platform for institutional clients. When you place rational actors in that position, they will rationally optimise for institutional clients.
I was, as far as I could observe, the only voice consistently advocating for grassroots adoption — for the tools and infrastructure that would make Cardano usable by the communities it had originally identified as its primary constituency. The arguments I presented were not rebutted. They were not engaged with substantively. They were received with what I can only describe as systematic disinterest — not hostility, which would at least have implied that the stakes were understood, but the particular indifference that signals a mismatch between what is being said and what the room considers relevant.
The committees that exist nominally to ensure a balanced approach did not function as counterweights. Grassroots-oriented activities appeared on agendas and in communications as optics — signals of inclusivity rather than substantive commitments. When allocation decisions were made, the grassroots was absent from them.
Grassroots-oriented activities appeared as optics — signals of inclusivity rather than substantive commitments. When allocation decisions were made, the grassroots was absent from them.
I am not raising this to attack the individuals involved. The people I worked with in Intersect were, by and large, competent and well-intentioned. The problem is not their character. It is that the governance structure placed them in a position where serving institutional clients was the path of least resistance, and serving grassroots communities required swimming against every incentive the system created. The correct response is to change the incentives, not to demand heroism from the participants.
3. The incentive mechanism that failed
The governance experiment did not produce the intended result primarily because its incentive architecture was wrong — specifically, because it empowered actors with no direct stake in the outcomes the mission required.
Commercial entities that acquired ADA on the open market, SPOs whose returns depend on network health, developers whose professional reputation is built on Cardano’s success — these actors are subject to market discipline. Their financial interests are coupled to the ecosystem’s performance. The market mechanism functions on them, however imperfectly.
The Cardano Foundation presents a structurally different case. Its officers are salaried employees of a Swiss foundation. They do not hold ADA as a condition of their role. Their personal financial outcomes are not coupled to ADA price or network health. They face reputational risk, not financial risk, from governance failures — and reputational risk in a foundation context is almost perfectly insulated from market feedback. Hoskinson has himself described the Foundation’s unaccountability as the worst mistake of his career. The evidence of the past year supports that assessment.
The DRep layer compounded this problem. When governance weight is determined by delegated stake, and delegation is determined by political popularity, the effective governance unit becomes political capital rather than financial stake. DReps with high institutional visibility attract delegation regardless of whether their positions reflect the interests of those most affected by governance outcomes. This is the mechanism that channelled treasury resources toward enterprises and governments while the builders who constituted the ecosystem’s operational tissue went unfunded.
4. Catalyst: a failed experiment without a reckoning
I participated in Catalyst since Fund 1. I believed in what it was attempting: an open, decentralised funding mechanism through which the community itself would direct treasury resources toward what the ecosystem genuinely needed. The ambition was right. The experiment, as a vehicle for grassroots adoption, failed.
The failure followed a predictable pattern. Catalyst rewarded proposal-writing skill, network visibility, and the ability to present work in formats that resonated with the existing voter base — which was itself predominantly technical, English-speaking, and oriented toward infrastructure and tooling rather than grassroots access. Communities in the developing world, who lacked the proposal-writing infrastructure, the English fluency, or the network connections to compete in that environment, were systematically disadvantaged. The mechanism that was supposed to be open and decentralised was, in practice, optimised for those who already knew how to navigate it.
What makes this worse is that there was no accountability mechanism for that failure. No process existed to measure whether Catalyst funding was producing grassroots adoption, to evaluate whether the stated mission was being served, or to adjust the mechanism when the evidence showed it was not. Funds were disbursed. Reports were filed. The grassroots users for whom the ecosystem was nominally being built remained unreached. And the cycle continued, fund after fund, without structural correction.
The response to this failure has now made the situation categorically worse. The proposal to transfer Catalyst to the Cardano Foundation — the least accountable entity in the ecosystem, the one whose officers bear no financial stake in outcomes and face no meaningful community sanction for poor decisions — is not a reform. It is the institutionalisation of the failure. It takes a mechanism that failed because it lacked accountability and places it under the entity that Hoskinson himself has identified as being immune to accountability at every level.
This decision cannot be attributed to malice. It can only be attributed to a governance environment that has become an echo chamber — one where the absence of grassroots voices, the absence of the communities the ecosystem was built to serve, and the absence of any feedback mechanism connecting allocation decisions to ground-level outcomes has made it impossible to generate genuinely new ideas. When the room contains only the same actors applying the same logic, the solutions produced will reproduce the same failures.
Catalyst failed to reach the grassroots — and there was no mechanism to account for that failure. Transferring it to the least accountable entity in the ecosystem is not a solution. It is the failure promoted to policy.
5. A specific observation on RealFi
Hoskinson has mentioned RealFi as a project he remains passionate about — bringing financial services to the unbanked. The intention is right. The structural problem is that RealFi, as currently constituted, is IOG’s project — not Cardano’s project in the sense that would matter. For it to deliver what it promises, it cannot remain dependent on any single company’s continued commitment, funding, or leadership.
A project that onboards millions of grassroots users must be designed so that those users can onboard themselves — through infrastructure that is open, community-governed, and not contingent on the survival of any sponsoring organisation. The moment RealFi’s viability depends on IOG’s treasury allocation or any founder’s personal advocacy, it has the same structural vulnerability as every other founder-dependent initiative in this space: when the sponsor’s priorities shift, the users are left behind.
A project that onboards millions of users must be designed so that those users can onboard themselves. Founder-dependent initiatives have a founder-dependent lifespan.
6. What Cardano promised and what the mechanism could deliver
Cardano made a large promise: to bank the unbanked, to serve communities without access to traditional financial infrastructure, to provide self-sovereign financial tools to people whom every previous system had excluded. This promise was not cynical. It remains the most important promise in the blockchain space.
But it was never only a humanitarian promise. It was a strategic thesis. The original logic was clear: onboard the hundreds of millions of people in the developing world who have no banking access, build the tools they need to govern their own financial lives on Cardano’s infrastructure, and the network effect created by that user base would make Cardano the dominant blockchain platform. Mass adoption from the bottom up — not from enterprise contracts and government pilots, but from the lived financial needs of the largest underserved population on earth.
That thesis was correct. It remains correct. The tragedy is that the governance system sabotaged the last mile. The treasury that was supposed to fund the access layer — the offline tools, the local-language interfaces, the low-fee micro-contribution infrastructure — was captured by actors optimising for institutional clients who already have banking access and do not need what Cardano uniquely offers. The network effect was never seeded because the users who would have created it were never reached. Cardano ran the race and failed to cross the finish line — not because the destination was wrong, but because the governance mechanism redirected resources away from the path that led there.
A treasury governance mechanism that rewards political capital over demonstrated community need will systematically fail to fund what the unbanked actually require: offline transaction capability, fee levels accessible at micro-contribution scale, identity infrastructure that does not depend on a government-issued document, tools designed for a thirty-dollar Android phone with intermittent connectivity. This is not a failure of intention. It is a failure of design.
The original thesis was correct: onboard the unbanked, and the network effect would make Cardano dominant. The governance system sabotaged the last mile. The race was run; the finish line was never crossed — not because the destination was wrong, but because the mechanism redirected resources away from the path that led there.
7. What does not need to change
Cardano does not need to abandon its technical architecture. The eUTxO model is genuinely superior for the use cases Cardano originally identified. Offline transaction construction — building and signing a transaction on a device with no internet connection, submitting when connectivity returns — is the feature that makes Cardano usable by a rural community treasurer managing contributions on a shared phone. That capability exists. It was never inaccessible because of a technical limitation. It was inaccessible because the governance system never funded the tools to make it reachable.
Cardano has delivered on the technical layer. The deficit is not in what was built. It is in who was built for.
8. The users Cardano needs
Those users are not abstractions. They are the members of Iddir mutual risk sharing networks operating across Ethiopia and the diaspora, managing collective financial security through member-governed institutions that have functioned without banking access for generations. They are participants in Equb savings circles that operate on social trust because formal credit is unavailable. They are communities that have been running durable, accountable, member-governed financial institutions for a century — without blockchain — and who would benefit most from a substrate that genuinely served their operational requirements.
Bringing these users onboard does not require new technology. It requires building the access layer that makes the existing technology usable in their conditions: their languages, their connectivity environments, their identity situations, their device constraints. That access layer was never built — not because it was technically impossible, but because the governance structure was oriented toward clients who did not need it.
The users Cardano promised to serve have been governing their own financial lives for generations without us. They do not need to be taught. They need to be reached.
9. The governance reform that is actually required
The governance mechanism must evolve, but it does not need to be invented from scratch. Three categories of actor need formal representation, each weighted by the accountability mechanism appropriate to their role.
9.1 ADA holders — market-disciplined stake
Holders of ADA with genuine financial exposure to network outcomes are a legitimate governance constituency for protocol-level decisions. The critical reform is the structural distinction between market-disciplined stake and unanchored institutional influence. The Cardano Foundation’s governance weight should be formally categorised so that its non-financial stake is transparent to delegators. This is not punitive. It is accurate labelling.
9.2 Professionals — expertise-weighted technical layer
Developers, SPOs, and technical contributors constitute a second legitimate constituency whose weight should be anchored in demonstrated expertise and operational commitment. A formal professional layer would provide the technical quality signal that the current political popularity market systematically fails to generate.
9.3 Users — a human signal layer
The third constituency is the one currently absent: the actual users of the infrastructure, represented through their constituted community organisations. The mechanism for this representation should not be delegation solicitation, which would reproduce the political popularity market at a different level. It should be weight computed from two verifiable on-chain signals: verified human participants, attested through self-sovereign identity credentials; and economic activity generated for the Cardano ecosystem. An organisation that brings verified human participants to Cardano and generates measurable transaction volume has demonstrated real adoption. That demonstration should translate into governance signal — not through campaigning, but through the observable evidence of use.
Weight earned through verified human participation and demonstrated ecosystem contribution is a different signal from weight accumulated through political capital. Cardano needs both signals, not one.
10. Some thoughts on reforming the DRep mechanism itself
I want to be clear that this section is not a finished proposal. It is a set of directions that seem worth exploring, offered in the hope that others with deeper governance design expertise will stress-test and improve them.
The DRep idea is not fundamentally wrong. Delegation gives small ADA holders a meaningful voice without requiring them to personally evaluate every governance proposal — that is a genuine contribution. The problem is that the current mechanism selects for political popularity rather than governance quality, and gives delegators almost no tools to distinguish between the two. Faced with savvy marketers on one side and genuine but low-visibility experts on the other, most delegators will make the wrong choice — not from stupidity but from lack of a legible quality signal.
Four directions seem worth exploring together:
Proportional stake floor for DRep eligibility. A DRep’s maximum governance weight could be capped as a multiple of their own staked ADA — for example, a DRep may represent up to 100x their personal stake in delegated weight. This directly links governance power to financial exposure. A DRep whose decisions consistently depreciate ADA suffers personally. It does not eliminate the popularity problem, but it ensures that the actors with the most governance power have real skin in the game.
Prediction markets as a quality signal layer. Alongside governance votes, a prediction market on measurable outcomes — network activity, verified user growth, ecosystem health metrics — could run in parallel for significant treasury decisions. The implied probability, reflecting what informed participants actually believe will work, becomes a public signal visible to all delegators. Over time, a DRep’s track record of backing proposals the market rated highly versus poorly provides a quality measure that is harder to manufacture than social media presence. This is an application of futarchy logic: not replacing the vote, but giving delegators a second signal that political operators cannot easily fake.
Automatic delegation lapse with performance reporting. Delegations that persist indefinitely allow governance weight to accumulate behind DReps who have since declined in quality. A periodic automatic lapse — 12 months, say — with a standardised performance report published at renewal time creates a regular accountability moment without eliminating delegation as a mechanism.
Domain-scoped delegation. A delegator could split their vote across different DReps for different decision categories — protocol parameters, treasury allocation, constitutional amendments. A DRep with genuine expertise in social impact who holds no cryptographic competence would carry weight in their domain without that credibility extending to technical questions they are not qualified to evaluate.
None of these is without problems. The stake floor risks disadvantaging credible community voices with modest holdings. Prediction markets can be manipulated by large holders who take coordinated positions. Domain boundaries will be contested on every proposal that crosses them. These are genuine objections, not fatal ones — but they require design work this letter cannot substitute for. I raise them as directions worth the community’s attention, not as finished conclusions.
The DRep system is not beyond saving. But saving it requires replacing the political popularity contest with mechanisms that make governance quality legible — to delegators who cannot evaluate proposals directly and should not have to.
11. A final note
Hoskinson has called for new ideas. These ideas are not new. They have been on this forum and in the Intersect committee for over a year, and in Catalyst discussions before that. What is new is the moment — and perhaps the openness that genuine crisis can create.
I write this as someone who still believes Cardano can deliver what it promised — not from optimism by disposition, but because the technical foundation is there, the users who need it exist, and the gap between them is a governance problem, not a technical one. Governance problems are solvable.
The Iddir tradition survived a century of adverse conditions not because any founder was irreplaceable, but because the institution’s governance was anchored in the community it served. That is the principle Cardano needs to recover — not as aspiration, but as structural design. The tools to implement it exist. The evidence that it works exists. The only question is whether the will to build it can be assembled before the people who should benefit from it give up waiting.
Independent Researcher · Dihre-Iddir Research · https://iddir.org/
Founding Member, Intersect · Intersect Product Committee 2025–2026 · Catalyst participant since Fund 1