Who Generates the Transactions That Secure the Chain?
Over the past years I have been trying to answer a simple question:
Who actually generates the transactions that secure a blockchain?
This question matters because the security of a Proof-of-Stake network ultimately depends on sustained transaction activity. Fees, usage, and economic demand determine whether a chain remains secure in the long term.
My thinking on this topic does not come primarily from theory. It comes from several experiences:
- many years as a grassroots community organizer
- participation in Catalyst since early funds
- observing how Catalyst funding shapes incentives
- studying the adoption strategies of different Cardano entities
(Cardano Foundation, Emurgo, IOG, and more recently Intersect) - serving on an Intersect Product Committee over the past year
Looking at these experiences together led me to a realization that I think deserves discussion.
The Question Most Adoption Discussions Ignore
Most ecosystem discussions ask:
- How many partnerships do we have?
- How many governments are interested?
- How many developers are building?
But the more fundamental question is:
Who generates the transactions that secure the chain?
Because ultimately usage is what anchors the protocol.
Research Context
In blockchain research and industry analysis there are already similar distinctions.
For example:
- The Chainalysis Global Crypto Adoption Index distinguishes grassroots crypto adoption from institutional usage.
- Academic literature frequently separates public blockchain ecosystems from enterprise blockchain systems.
- Innovation research distinguishes bottom-up adoption from top-down adoption.
These frameworks point to an important structural reality:
Different types of adoption generate very different relationships with the base layer.
Three Types of Blockchain Adoption
Based on both research and observation, blockchain adoption can be roughly divided into three categories.
1. Sponsored Institutional Adoption (Top-Down)
This is adoption that happens because an organization is actively courted or funded by ecosystem actors.
Examples include:
- government partnerships
- NGO programs
- corporate pilots
- enterprise integration projects
These initiatives are often promoted by:
- foundations
- ecosystem funds
- consulting groups
- treasury funded initiatives
Contribution to L1
These actors typically prefer:
- private infrastructure
- sidechains
- permissioned systems
- occasional settlement to L1
Their incentives are:
- cost control
- data control
- regulatory control
As a result, their contribution to L1 transaction volume is usually limited.
2. Grassroots Adoption (Bottom-Up)
This is adoption driven directly by individual users and community organizations.
Examples include:
- peer-to-peer payments
- remittances
- community mutual-aid networks
- small businesses
- local economic networks
These users adopt tools because they solve a real problem, not because a partnership program encouraged them to do so.
They typically rely on:
- publicly available wallets
- open smart contracts
- public blockchain infrastructure
Contribution to L1
Because grassroots users do not have the ability to run private chains, they naturally use the public base layer.
This means:
- they generate transactions
- they pay fees
- they create economic demand for the protocol
In other words:
Grassroots users are structurally aligned with L1 usage.
3. Autonomous Institutional Adoption
A third category is when enterprises adopt blockchain technology independently, investing their own resources.
Examples include:
- corporations building internal systems
- governments deploying blockchain infrastructure
- companies building proprietary chains
These actors typically have:
- technical capacity
- financial resources
- control over infrastructure
Contribution to L1
Because of these capabilities, they often prefer:
- private chains
- consortium chains
- limited interaction with public L1
Their goal is usually efficiency and control rather than participation in a public network.
Why This Distinction Matters
When looking at the long-term sustainability of a blockchain, one observation becomes important:
The category that most reliably generates L1 transactions is grassroots adoption.
Institutional adoption can be valuable in many ways. But structurally it tends to minimize interaction with public infrastructure.
Grassroots adoption, on the other hand, is naturally anchored to the base layer.
Observations From the Cardano Ecosystem
Over the years I have observed several patterns.
Catalyst
Catalyst funding often includes projects claiming to work on grassroots adoption.
However, in practice many of these initiatives:
- organize workshops
- host events
- conduct meetings
But rarely produce tools that communities can directly adopt and use.
Adoption Programs
Many initiatives that claim to target grassroots users are actually focused on:
- serving institutional partners
- engaging governments
- supporting NGOs
- developer ecosystem building
These are important activities.
But they are not the same thing as building tools that ordinary users can adopt independently.
The Africa Summit Example
A recent example is the Cardano Africa Summit.
Much of the discussion focused on:
- institutional adoption
- enterprise partnerships
- developer ecosystems
Yet the category that ultimately determines network security — users generating transactions — received comparatively little attention.
Grassroots users often become an afterthought, even though they represent the largest potential economic base.
A Strategic Question for Cardano
This leads to a strategic question for the ecosystem:
Who generates the transactions that secure the chain?
If the answer is primarily grassroots users, then it raises another question:
Are we investing enough in the tools and infrastructure they need?
Because grassroots adoption does not emerge from:
- conferences
- workshops
- partnership announcements
It emerges from tools that communities can adopt directly.
The Risk of Institutional Lock-In
There is another dimension to consider.
If institutional actors successfully lock grassroots users into private platforms, two things can happen:
- user freedom is reduced
- L1 activity declines
In that situation the protocol risks becoming infrastructure beneath centralized platforms, rather than a truly decentralized economic layer.
Final Thought
Institutional adoption, developer ecosystems, and research are all important.
But if the goal is a secure and sustainable public blockchain, we should regularly return to the fundamental question:
Who generates the transactions that secure the chain?
Because the answer to that question should guide where we place our long-term strategic investments.
