Charles Hoskinson’s Stand Against Burning ADA Treasury Tokens
Charles Hoskinson, the visionary behind Cardano, has expressed his strong opposition to the proposal of burning over 1.5 billion ADA treasury tokens, valued at approximately $500 million. His comments shed light on a significant topic within the blockchain community.
Concerns Raised by Hoskinson
In a recent post on September 5, shared via X, Hoskinson highlighted that these treasury assets were not simply preprinted tokens but were generated through the process of block production and transaction activities.
He emphasized that destroying these tokens would essentially equate to theft from Stake Pool Operators (SPOs) and ADA holders, stating:
“The entire treasury comes from people building blocks and economic activity. You are effectively stealing from every SPO and ADA holder if you burn the treasury.”
Community Reactions to Treasury Burning
Hoskinson’s remarks come amidst rising discussions regarding the potential burning of the treasury tokens, particularly following Cardano’s recent integration of decentralized governance.
On September 1, Cardano achieved a significant milestone by completing the first phase of its Chang hard fork. This development positioned Cardano as the first layer-1 blockchain to implement a token-based governance system.
Exploring Treasury Utilization
As the Cardano community adapts to its newfound governance capabilities, members are exploring various uses for the treasury assets. A community member, Big Pey, raised the question of whether to burn the treasury assets, stating:
“Now that Cardano has full on-chain governance. There’s 1.5 Billion ADA in the treasury. The ADA community could vote to burn all of the ADA. Would you vote to burn all of the ADA? If not, what do you think we need to spend the funds on?”
This proposal has garnered mixed responses. Some community members see a potential rise in ADA’s price from burning the tokens, while others caution against possible repercussions from such a move.
Alternative Suggestions from the Community
Jaromír Tesař, one of the network’s decentralized representatives (DReps), voiced his disapproval of the burning proposal, calling it a “terrible mistake.” He proposed that the treasury funds could be better utilized for:
- Launching additional Catalyst Funds
- Providing liquidity for DeFi initiatives
- Accelerating the development of scalability technologies
- Supporting the deployment of USDC and USDT on Cardano
- Investing in marketing efforts
He remarked:
“We could launch several more Catalyst Funds, use ADA for liquidity in DeFi, accelerate the development of scalability technologies, fund the deployment of USDC and USDT on Cardano, and even invest in marketing.”
