Will ADA Whales Ever Give Up Their Power?

Agree with you. Is there any way any IOHK/ Cardano team member can comment on this? That would be great.


@magnetar Even the constitution of a country can be amended as long as enough stakeholders agree to amend it. That’s the key: Helping enough stakeholders (whales in this case) to really understand the long-term consequences of this problem so that they are not blinded by self-interest.

And if they don’t already understand the gravity of the problem, this might help: Every economy is built on confidence, which means all their wealth is built on the confidence of our community. If the community loses confidence in the integrity of the ADA economy, the price of ADA will never reach its full potential. That means their wealth will never rise much more than it is right now; and in fact, the price will collapse as this fear becomes more widespread. Thus, the most rational option for any whale is to take action immediately to allay the fears of the community before this spreads like a wildfire and destroys their current and future ADA wealth.


What do you want them to do? sell? if even ONE of the guys on that list exited, the exchange price of ADA would be 0.01$

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The U.S. constitution is designed to be amended. Once a sale is made you can’t tell people what to with it if that was not specified in the bill of sale. Basically we are at the mercy of Whales.
Jeff Caleb was taken to court by the Ripple team, when he created Stellar, to ensure he did not dump his XRP on the market all at once. That is quite different from challenging ICO investors though.


@HazelMazel3 Nope, I described what should occur in my original post: A slow, predictable, systematic liquidation of some portion of the whales’ ADA positions over a rational, pre-defined schedule, which prevents them from significantly moving the market during each liquidation cycle.

But playing the devil’s advocate: Let’s say they did dump their ADA more quickly and the price went to $0.01, do you think that short-term dip in prices matters in the long-run? The whole point of building this platform is to create a socioeconomic system that will last generations. And if humanity doesn’t destroy itself before, we should be thinking in terms of millennia, not weekly/monthly price dips.

I have a large ADA position and I don’t care one ADA about the price going to $0.0 if it means that the entire system will be more sustainable over the long-run. Hopefully you agree.


@magnetar I won’t presume to know your business experience, but let me share mine:

I’ve been involved in many multi-million-dollar transactions. Sometimes those transactions go bad for various reasons. When they go bad, people have two choices: Litigation or contract novation. When litigation is likely to destroy the value of the assets and relationships involved, rational actors choose contract novation. That’s what we’re talking about here.

So, there’s nothing sacrosanct about an ADA voucher sale. If the parties to the voucher sales understand the gravity of this problem, they will voluntarily come together to resolve the problem by executing new voucher contracts until the community is sufficiently satisfied. That’s how all post-hoc contract novations work.


I don’t but can you can tell me with confidence that even if the Ada sale did not have a clause specifying that whales can not dump their Ada, that they can now amend the terms of that sale - also considering this is cryptocurrency sold in Japan ?

I thought novation has do do with paying a debt. What does that have to do with the sale of a crypto asset ?

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The development gets paid from cf’s ADA, right, so if it’s 0.00$ then… I do not know what the terms were for the earliest investors (and that is who we are talking about) and I doubt anyone will tell you. If there were terms they would most likely be that they have to HOLD a certain amount for a certain period of time, not liquidate… but this is all academic.

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I would hope that it dictated the rate at which they can liquidate but we can only assume.

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100% confidence, dear @magnetar. Every corporate lawyer and contract law expert will confirm what I’m telling you: Every contract or sale can be amended as long as the parties to the contract want to amend it. That’s the key: Persuading all the stakeholders to voluntarily want to amend it, which is not easy, but it’s certainly not impossible.

That’s why this thread is so important: Raising awareness of the problem to a level that incentivizes the team and the whales to take action to either:

(a) help the community understand whether the voucher sales already have a forced-liquidation provision (and allow us to see the precise terms/conditions); or
(b) start sharing exactly how they intend to resolve the problem from this point forward.

This is not a crisis as long as there is a clear and compelling path to reducing the whales’ control over the ecosystem with meaningful ways to hold the team and whales accountable to a specific Gini Index target range. If there is no clear and compelling path to resolution, then we will have a crisis of confidence, which will lead to a collapse of the currency. A crisis of confidence is how every fiat and crypto currency has collapsed throughout human history over the past 1,000 years (over 1,000 fiat currencies and 100s of cryptocurrencies and counting. . . .)

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OK - yes a I know they can amend the contract if they want to but that is the key here - if they want to. I thought you were telling me they could force them to amend it.

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Sorry, forgot to answer this part of your post. Debt contracts are just contracts between two consenting parties. The concept of “novation” applies to all contracts. Debt contracts are just a sub-category of all contracts.

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All we can do is request transparency on the terms of liquidation for the early investors. The Cardano team has done their due diligence on the technology. Let’s hope they did the same with the economics.

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It is only different in the quantity of stakeholders, but the essence of the contract is no different. Also, it’s actually much easier in this case because the team executed a private placement, not a public ICO. And they collected KYC information from every voucher buyer. Thus, they already have all the personal details and contact information for all the whales. If the team and whales really want to fix this problem, they can do it easily.

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I wonder if the Ada that has been put aside for staking rewards is included in that list of richest Ada addresses. There is a large percentage set aside for that purpose.

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I thought you meant forcing them into a contract change hence my example of the XRP law suit requiring a slow liquidation over several years. As far as I know that is the biggest case of it’s kind.

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No, it doesn’t include staking rewards, but it does give us a clear understanding about who will get the staking rewards: the whales. This is because the whales will also be able to gobble up the vast majority of all the staking rewards because a Proof-of-Stake algo rewards stake, which perpetuates the cycle of wealth concentration. That’s another reason why the ADA distribution right now is entirely incompatible with the stated goals of the project.

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So the 14 billion to be used for staking fees has not even been created yet then ?

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Correct, according to the Cardano monetary policy.

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I don’t really have much to contribute, but I agree that this is problem.