The Wildfire of Social Media: Burning Tokens

Hi, this is private citizen Charles Hoskinson broadcasting live from warm, sunny Colorado. Today is September 6, 2024. Time is just flying by, buzzing a bee. The honey guys gave this to me; I think they’re in Bulgaria and they’re going to set up some hives at my ranch. Anyway, I wanted to make a video to talk a little bit about social media and how it distorts narratives and how people exist on such a surface level of information.

Unfortunately, this has significant impacts on us as an ecosystem, and we need to guard and protect ourselves as we step into on-chain governance. As of today, September 6, 2024, there is no capability in the governance functions of Cardano to burn all of the funds of the treasury. One could hack a treasury withdrawal function to send the funds to a burn address, but you can’t do that until Chang plus one when the DApps come online. So, there is no capability or serious proposal on the table to burn all the ADA. I made a tweet in response because there are currently constitutional workshops happening, and it’s a legitimate topic to discuss regarding the monetary supply of Cardano.

There are some deeply misinformed people whose only concern is the appreciation of the value of ADA, naively thinking that destroying all of the community funds—which we all paid taxes into—will somehow improve the price of ADA so they can then dump it the minute the tokens go up. This is probably not even a small minority opinion among Cardano holders, but the media is running numerous articles saying there’s a big debate in Cardano, claiming that we’re seriously fighting and trying to figure things out. Already, people are saying, “See, the governance of Cardano has failed; the mob has taken over, and they’re trying to destroy Cardano’s institutions and its future for their own greed.” This is an example of what happens in social media. You take one thing that is intended to provoke a discussion in the constitutional workshops about whether we should add an amendment to the Constitution stating that there shall only ever be 45 billion ADA and that you can’t burn ADA.

That has to be decided by and for the delegates. I can’t make that decision for you; it’s a decentralized conversation. Instead, we translate that into a narrative that there’s a real and legitimate governance fight going on in Cardano right now about basically destroying the entire future of the chain to make the token price go up a little bit. In reality, the token price would likely go down because people would realize there are no resources left for growth. We need to chill out and understand that as an ecosystem, we are behind on certain things and ahead on others.

We are ahead on vision, foundational technology processes, adult conversations, and the capacity to stage developers and scientists to solve some of the hardest problems humanity has ever faced. As it stands in 2024, there is a coalition of people working on Cardano, making it number one for GitHub commits, number one for scientific papers, and number one for vision in terms of where technology goes. We are ahead there. There are many changes we need to make to improve transparency and flexibility, get rid of monolithic architectures, and embrace other programming languages. There’s a lot to do.

The tagline is, “We know we’re working on it,” and I’m going to make a speech about that next month, discussing the next five years and where I think we ought to go. Where we are behind is in marketing, branding, and growth hacking. The reason for this is that the founding set of entities was never really clear on how accountability would work. This was a flaw in the construction of the founding set of entities, and unfortunately, because of that, we’ve been outcompeted in some respects by the Solanas of the world, which dump hundreds of millions of dollars into this and other blockchains. They’ve been able to leapfrog narratives and proactively define Cardano to those who have spent no time in our ecosystem, spreading misinformation like wildfire—such as claims of one transaction per second, ghost chains, no adoption, and dying ecosystems.

We can either be angry about it and say it’s not true or acknowledge that we are behind in terms of brand and narrative. We need to repair relationships with the media, with VCs, and with developer communities outside of Cardano. That’s the second coalition we need to put together, and currently, there are discussions at Intersect about a marketing group, but they definitely need to be broadened in the coming months. When we talk about an annualized budget, my goal is to bring that into the family and treat it as a first-class citizen alongside science, engineering, and vision. We need to retell the story of Cardano in a way that people better understand across the industry as a whole.

We should showcase our profound achievements and wins, emphasizing that we’re moving much faster in many respects than others, and that this is the best and safest ecosystem to build in long-term. Furthermore, we have to be intellectually honest about what KPIs we track as an ecosystem and optimize for. For example, if we care about TVL, we need to track it and hold people accountable for its growth. Should we care about transaction volume per day? If we track it, who’s accountable, and where do we want to take it from there?

When we look at strategy paired with a budget, those are the kinds of adult conversations we need to have. Every time we market and brand, we should start with where the KPIs are at and how those key performance indicators are growing over time. This new governance structure is truly amazing because it allows a nice interplay between institutions and on-chain governance, putting the community in the driver’s seat to ultimately decide whether to go down this path or an alternative path. Institutions can do what they do best: take complexity, fragmentation, and chaos and turn it into order and simplicity. This is how every good government operates, from Switzerland on down, even the bad ones attempt to do this.

That’s how you go to the moon, win wars, build rail lines across your country, and transform your entire power grid from coal to nuclear. That’s how you get things done that impact and change the lives of people. I firmly believe the foundations we’ve set, where we’re ahead, give us the right to engage in conversations about changing the economic, political, and social systems of the world at a scale of millions, eventually billions of people. We have the vision to do this. Our ability to govern, coordinate, and work together will determine whether we actually achieve this.

This is the grand vision of Voltaire, and that’s why I say it’s the single biggest competitive advantage we have. All the other ecosystems are either saying they’re perfect as of January 3, 2009, and don’t need to change anything, or they’re relying on some founder to figure it all out. These are absurd positions, but that is the reality for the vast majority of projects in the cryptocurrency ecosystem. Ecosystems like Cardano have embraced a very different view: while we have a great start, it’s not perfection, and we acknowledge it has to be improved. You can’t trust one founder forever to figure everything out because the world is complicated and founders die.

It’s crucial that decentralized governance be embraced. We were the first to pair it with liquid democracy, institutional support, and constitutional representation, which I believe are the missing pieces to help take complexity and turn it into simplicity. If we pull this off, it means we can efficiently and effectively make high-integrity decisions about controversial topics, from roadmaps to budgets to ultimately who should be the key leaders to move forward. It’s important to understand that decentralization doesn’t mean you don’t have leaders; it means you have the power and ability to consent to have a leader and fire them if they don’t do the job you hired them to do. Every time we’ve wanted to get something done in human history, we’ve needed leaders to guide us.

The difference between a democracy and a dictatorship is that in a democracy, you get a say, while in a dictatorship, you don’t. That is what we’re embracing with the Cardano ecosystem. This example of misinformation shows that no one is going to make it easy for us, so we have to be hyper-vigilant and really push hard to ensure that the narrative is set straight. We’re not going to burn the treasury; no sane person would do that. To suggest it in an article and elevate it to the point that it’s a controversy is journalistic disintegrity.

The debate is whether that should be a power that the governance people have or not, and should we put that in the Constitution or not. Currently, we are having constitutional workshops—63 of them in 50 different countries—electing delegates to go to Argentina in December to ratify a constitution that will then be approved on-chain by you, the voters. It’s important to bring this issue up now because it’s harder to change the Constitution afterward. That’s why we’re talking about it as a hypothetical situation, not an actual situation, because constitutions have to be useful in the arc of history, not just today. That nuance will never be understood by the low-information crypto media and the VC companies that own them, which have already taken their bets on VC coins with 50-plus percent premiums that they’ve handed to friends and family to dump on retail when the markets recover.

That’s the truth of economics and the reality of many of the people we compete with. We are always going to be in a different place because we view things as an ecosystem and as a culture on a humanity scale, a civilization scale, and a decade-by-decade horizon. Others view things on a day-to-day, week-to-week, month-to-month basis, focusing solely on how to make the token price go up. They don’t care about principles, and if they sacrifice a principle to make a buck, that’s a good thing because they made the buck. Meanwhile, they’re more prepared and willing to sell out everything that makes decentralization and the Web3 principles possible if it means they’ve enriched themselves.

That is the difference. Bitcoin no longer has earned the right to call itself the only sound money blockchain. Cardano is here too, and we will not allow the Maxis and the Bitcoin ecosystem to take that from us. ADA is sound money. We are far more decentralized, deflationary in our monetary policy, and we’ve honored all the commitments and principles that were made.

We have engaged in a long arc roadmap and have been up for seven years. At what point are we a real cryptocurrency? They’ll never say it because they understand that the biggest threat to Bitcoin’s dominance has always been Cardano. We were the ones who listened to the innovators in the Bitcoin ecosystem—whether it was the innovators with Lightning, the innovators with color coins, or the innovators of Satoshi’s vision. Many of these people proposed amazing ideas, but none of them became first-class citizens in the Bitcoin roadmap because they claimed perfection was achieved on January 3, 2009.

We were the ecosystem that listened and finished the work. We created extended UTXO, Plutus, and all the derivative languages. We figured out how to get Nakamoto consensus to work properly in the proof-of-stake world, maintaining the same security properties as proof of work while taking all the benefits of proof of stake. It took a long time—nine years of meticulous research, dozens of papers, tons of peer review, formal methods work, and massive amounts of simulations, all on a live network for seven years that’s never gone down or been hacked. We took that road and showed the world how to do it.

Because of this, the programmability and now on-chain governance we have is a vastly superior model. They’re scared because they know that if it’s just about what has more adoption and price, and we’re thinking decade by decade with a better growth engine, it’s not even a competition. We will win and overcome. The only way we get there is by demonstrating that we’ve solved something even more significant: in an age of social media, drama, and low information, we as an ecosystem have set all of that aside and found a way to work together to create high-trust institutions. This will allow us to make high-integrity decisions that are both efficient and effective.

That is the only way we will continue to grow and thrive, having the ability to have adult conversations about what worked well and what didn’t. Yes, we have leaders—leaders you have selected, who are subject to the rule of law. Leaders who can be fired, leaders who are there to do a job that you have chosen, and once it’s done, they’re gone. That is how progress is made, and that is how this protocol is going to take over the world. I firmly believe Cardano’s best days are ahead of it, and I believe we’re on track.

It’s amazing progress that’s happening. I appreciate that it’s a little hard right now, and I know it’s very frustrating. I feel the media’s disinformation and the VC disinformation, and at times it feels a rigged system. It’s difficult when all these things hit us at the same time. On the dawn of our greatest achievement, Voltaire, we still haven’t gotten the love and support we deserve.

There was no grand article from CoinDesk; it wasn’t the Ethereum fork from proof of work to proof of stake, with Elon Musk tweeting about it and others. We’re not going to get that today because they don’t take us seriously. They think it’s something we’re going to correct, and it’s going to take time to correct. But in the end, once we do, what are they going to say? They’d rather live in a dictatorship, total centralization, or chaos.

They’d rather live with technology conceived in 2009 and never updated. They’d rather live with a system that’s not programmable or one that is programmable but fundamentally flawed in terms of its accounting and consensus model. They’d rather live in a system that makes no provisions to connect to the legacy world and doesn’t understand identity and other such things. No, of course not; it’s preposterous to suggest these things. They’re going to live in the gold standard—the standard that’s going to be number one, and that’s Cardano.

So, we’re going to get it done one way or the other. I thought it would be important to make a video and talk to everybody, saying that everything is going along exactly as we thought it would. I’m more excited today than I’ve ever been in my entire history of participating in Cardano. I honestly believe we have a real shot to do something that’s never been done before and to change the world. We can make governance finally work for people to work together, and we can have the ability to disagree without becoming disagreeable.

See you guys soon. Cheers!