In my substack post I argue that decentralised ecosystems struggle with coordination because thousands of actors optimise locally without a shared definition of success.
A small set of system-wide numbers can provide a shared axis of success and the coordination surface that allows autonomous actors to align around capital productivity and compound growth without central command.
For growth, numbers come before strategy. A small set of numbers can align thousands of decisions, priorities, and actions across an ecosystem without central command.
The ideas in the article bring a truly important reflection on the growth of a decentralized ecosystem like Cardano.
While scrolling through and reading it, one question came to my mind: which metrics do you think should serve as the compass for measuring the real growth of the ecosystem?
Again â just as it was over a year & a half ago â itâs embarrassing that neither Education nor Standards are considered by IO Marketing to be factors in ecosystem growth. Whole markets (e.g. NFTs) have been built upon Cardano standards (CIPs) and yet somehow these didnât even warrant a tiny bubble in your diagram.
@benohanlon we went through this quite some time ago:
⊠and you & your team have had quite enough time to rectify this exclusion before producing another commercially biased, crippled âecosystem mapâ. If you truly think that neither Standards nor Education have a role in promoting or sustaining the growth of the Cardano ecosystem, Iâd really like for you to explicitly describe the rationale for that here.
We really shouldnât be using the treasury to fund for profit companies or projects. Let them fund themselves or go get funding like normal companies.
Treasury is best suited for sustaining Cardano long term thru compensation to SPOs DReps and CC, development of core stack Cardano to complete the roadmap, then to MAYBE fund open source projects of some merit and value to be managed by the community.
No marketing, no business development funding, no venture funds, none of this mess is needed. If the business model doesnât make revenue to scale, we donât need to be giving them money to scale.
These may be IO visions for how to use the treasury, but the beauty of Cardano is itâs up to everyone to decide that.
I disagree. How is the treasury supposed to truly fund infrastructure and governance if, today, it is primarily fueled by ADA issuance? To me, itâs clear that nearly 10 years later, ignoring usability is a mistake. Saying that the projectâs business plan alone is whatâs failingârather than acknowledging that the Cardano brand has been losing ground year after year against competitorsâfeels like a blurred view of the current reality.
A high-level pipeline in terms of security and decentralization wonât bring water on its own. For that to happen, you need to make it easier for external sources to connect their water to the pipeline.
We donât need to do any of that tho if we just spent less money than we make for the treasury instead of trying to prop up DeFi and businesses that arenât clearing overhead on their own. It isnât for the treasury to subsidize them to exist or make profit.
Much of this is over complicated when the answer is simple:
Conservative Fiscal Commitments (Low budget)
Focused Expenditure on only Core Roadmap and what the community deems âcriticalâ open source work
From what I understand, the Pentad v2 proposal essentially focuses on investing in the main dApps that are bringing usability, transactions, and fees to the network, and then paying the treasury back with the revenue generatedâno longer as a subsidizer, but as an investor seeking returns that grow the treasury.
Spending less than what the treasury collects doesnât solve the current issue that its source is still more based on ADA issuance than on real profit generation. I donât expect us to outperform competitors on metrics right nowâI just hope Cardano wakes up and starts reversing the trend of fewer fees, transactions, and addresses each quarter, gradually moving toward growth in the future.
Itâs not useless to finance the things that can hardly work as for profit projects â node implementations, basic libraries, wallet apps. Those and only those are the ones that should be paid from the treasury.
Itâs a solid architecture. In the same class as Ethereum, Polkadot, or Solana probably. That it is âperfectâ, that it is so far ahead of everything else is one of the many delusions of Cardanians.
Might be that Cardano or crypto in general will only serve as a bad example in the future â the tulip bubble of the early 21st century, crazy how people could be dumb enough to fall for that, or maybe it wonât even be relevant enough to be remembered in twenty or fifty years.
Or it might be that some actual use case comes along. But itâs not the job of the treasury to bet on what that actual use case could be, to force it into existence, and waste lots and lots of our common money on bullshit in the process as Catalyst has done it for years.
I disagree. The treasury is a governance assetâitâs up to us to look at the numbers and make Cardano a sustainable environment for future generations and major use cases.
The debate here about what the treasury should fund is important, but it skips the mechanics of how the assets should be managed and guardrails for prudent spend
The 2026 NCL authorizes up to 350M ADA in net withdrawals - over one-third of total holdings. But the NCL is a spending cap, not a spending policy. It does not smooth expenditure across cycles, evaluate risk-adjusted returns, or define what happens if ADA drops 80% after commitments are approved.
Institutional treasuries of comparable scale - sovereign wealth funds, university endowments - operate under formal investment policy statements with asset allocation rules, risk limits, and spending formulas.
The treasury also holds over 1.5bn ADA and earns zero return and all has all the price risk
Market makers and institutional investors likely track how the treasury is being used and if disbursements appear excessive or undisciplined - large ADA sells without a clear framework or spending rationale - they price that in.
Liquidity providers widen their spreads, investors become less willing to take the other side of the trade, and the sell pressure from treasury outflows hits a thinner book.
A treasury that operates under a published investment policy with defined spending limits and risk governance sends a fundamentally different signal than one that simply draws down ad hoc.
The NCL was a necessary first step, but treating the treasury as capital that should be managed - not just drawn down - is the next one.
@COSDpool Iâm not saying Standards or Education do not matter. Iâm saying that in a decentralised ecosystem they do not create system level coordination on their own, because different layers and roles run their own diagnostics and optimise locally. That is the entropy risk in a decentralised system.
What coordinates the system is a shared axis of success, expressed through a small set of system wide units of account.
That axis is what allows many different strategies, including Standards, Education, governance, product, and capital formation, to orient in the same direction without central control.
This is not an ecosystem map. It is a coordination model for how growth compounds.
My view is simple: game selection is more important than player skill. The problem the flywheel addresses is that ecosystem layers and roles optimise locally and donât compound. Whatâs needed is a small set of system wide units of account to create a shared axis of success that everything can orient around. That allows a hundred strategies to bloom and a hundred schools of thought to contend. That is the superpower of decentralisation.
Standards and Education matter, but they only coordinate the system if they move the units of account and increase capital productivity.
If you want to critique the model, the better question is not whether those functions matter, but which units of account they move, by how much, and on what time horizon.
I think 2026 is pivotal. We donât have indefinite cycles left. If it all goes to zero the treasury wonât matter, we need to understand game selection is more important than player skill. And we need to explicitly name the game as growth, and define it as capital productivity. The name of the game has always been capital productivity.
Yes, even if youâre cypherpunk and building self-soverign tools because if sovereignty does not extend to the economic outcomes of personal capital, it is just symbolic. The point of sovereign financial infrastructure is that the individual captures the upside and bears the downside. - https://x.com/benohanlon/status/2033500008436134391?s=20
Of course. All the people at IOG paid quite well by the naĂŻve retail believers want to continue to get paid. And probably have some fear of that not happening after the lay-offs of the last years â Atala, Catalyst, other teams at least partially. I mean everyone in Cardano has witnessed all the people suddenly gone.
The most frustrating thing about crypto is the dishonesty. Every project â not only on Cardano â has to pretend to be a flawless unicorn, while in reality 99% are gambling, scams, future rug pulls, and lots of uncertainty and almost nobody has any clue of an actually sustainable business plan.
Hyper conservative policy is a losing strategy when the game is growth. If you look around Web3, it is obvious that revenue is the best marketing there is. Not deploying capital does not protect the treasury. If the price of $ADA drops, you are spending it anyway through lost purchasing power. The only question is whether the productive potential of the treasury is realised or wasted. Without productivity, the treasury leaks value through price decline. Deployment is not the only risk. Slower OODA loops are a risk. If others learn, decide, and deploy faster, they compound while we freefall into higher entropy. The treasury loses value as its productive potential declines. On the other hand, when capital is deployed productively, faster loops compound outcomes, entropy decreases, and the productive potential of the treasury increases.
