Cardano's $71 million governance reform experiment: Towards the path of autonomy - ChainCatcher

Author: Ethan, Odaily

On August 4th, in a quiet yet particularly important on-chain vote, the Cardano community passed a core proposal named "IOE Roadmap": to utilize up to 96,817,080 ADA (approximately 70 million USD based on the market price at that time) from the treasury funds to finance the technological upgrades of the Cardano core protocol. The final support rate for this proposal was 74.01%, which means that a radical reform plan initiated by Charles Hoskinson received more support than expected in a public chain system known for its slow governance.

According to the proposal document, the funding will mainly be used for three aspects: scalability improvements, developer experience optimization, and cross-chain interoperability upgrades. The underlying goal is clear: to lay a technological runway for Cardano towards the final phase of the "Voltaire Era". In other words, this is a global battle centered around "on-chain governance, DeFi ecosystem, and foundational protocol iterations."

This is not a small amount. In the context of DeFi projects, it is enough to support a complete Layer 1's annual development budget; in the context of Cardano itself, it is even the most significant allocation of protocol layer funds to date. Notably, this was not directly allocated by the three major entities: the foundation, IOG, or EMURGO, but initiated through on-chain community proposals and approved by governance mechanisms — this signifies that Cardano is taking action towards its long-claimed goal of decentralization.

But surrounding this grant vote, there are not only consensus but also many questions. Why spend this money when the market's attention is not on it? Who will supervise the use of these funds? Will the grant itself trigger a change in ADA's liquidity? And all questions point to that familiar name: Charles Hoskinson (the founder of Cardano).

Starting from 2023, Hoskinson's style seems to have undergone a fundamental shift: from a "philosophical technological idealist" to a "pragmatist actively promoting governance reform." This $71 million grant may very well be a footnote to his identity transformation.

Is all of this a result of accidental path dependence, or was there already a foundation laid? Let's go back to the starting point of the proposal.

Proposal Review: From Criticizing Ethereum to Building Self-Governance

If Ethereum defines the "general computing logic of smart contracts", then Cardano's ambition has always gone beyond just the code-level "intelligence". In Hoskinson's long-standing statements, Cardano embodies a more complete "institutional experiment"—it is not just a decentralized execution tool, but rather a public governance system on-chain that can self-update and self-manage. To achieve this goal, he has invested in the patience of building "institutional components" from scratch over and over again, as well as a stubborn belief that "slow is fast".

The approval of the funding proposal is not a sudden move, but a natural extension of Cardano's entire governance advancement path. As early as April 2024, Cardano officially announced a hard fork upgrade plan named Chang, which is being implemented in two phases to promote network governance autonomy—at the core of which is the reconstruction of the on-chain voting mechanism, constitutional framework, and treasury allocation authority, ultimately moving towards the last phase of its roadmap, the so-called "Voltaire era."

On a technical level, the Chang upgrade accompanied by the CIP-1694 proposal restructured the power distribution among governance participants. ADA holders will be able to delegate their governance rights to "DReps" (representative voters), SPOs (stake pool operators), and the Interim Constitutional Committee (ICC), thereby forming a governance pattern that combines checks and balances with on-chain execution. All of this will be automated on-chain through smart contracts and the CIP roadmap, without relying on the foundation or Hoskinson himself.

Image source from "What to Know About the Chang Hard Fork (Cardano)"

This design sounds complex, but the core logic is actually very simple: The distribution of governance rights should match the distribution of economic interests. This is also the "true decentralization" that Hoskinson has emphasized for many years, a structure that no longer relies on leaders but is led by token holders in decision-making.

However, to truly translate ideals into reality, merely relying on mechanism design is not enough; execution capability, technical architecture, and governance infrastructure must keep up. Thus, the matter of "allocating $71 million" is no longer just a financial allocation issue; it is almost a "big test" of the entire system design.

The more critical point is that this funding is not a personal directive from Charles Hoskinson, but rather a result of community proposals and on-chain voting. At least from the perspective of the execution layer, it also supports the idea that Cardano is transitioning from "founder-led" to "institution-driven." Even if the process is long and the pace is slow, it is in some way fulfilling Hoskinson's promise from back in the day.

In an AMA back in April 2025, Hoskinson once again criticized the three structural flaws of Ethereum: the flawed economic model, the design redundancy of the VM, and the "parasitic" nature of L2 that drains the value of the main chain. He pointed out, "Their governance model fails to address the core scalability issues and instead drains the value of the main chain." Cardano's response is its very essence—building a complete public governance stack of its own. In this structure, the funds are not a weapon controlled by the founding team but a concrete manifestation of the governance will of ADA holders. $71 million is just the first step; the real endgame is whether Cardano can become the first truly self-governing financial protocol ecosystem in the crypto world.

However, this autonomous route is not without doubts and divisions.

Controversial Views: Criticism from Other Chains, Community Distrust, and the Rebuilding of the Founder's Credibility

For the Cardano community, this is not just a simple upgrade vote, but more like a trust test for Charles Hoskinson himself — and the tension arises precisely because Hoskinson has always been the entire brilliance of this project and the center of all controversies.

Back in June 2025, Hoskinson made a bold suggestion during a livestream: to exchange ADA worth 100 million USD for Bitcoin and stablecoins within the ecosystem to improve the liquidity of Cardano's stablecoins and promote the development of the Bitcoin DeFi ecosystem, Cardinal. He stated that Cardano's current TVL is seriously lagging behind the scale of stablecoins, and this conversion would "bring non-inflationary income" and build a healthier asset base.

As soon as this proposal came out, it immediately sparked controversy. **Solana co-founder Anatoly Yakovenko publicly criticized the proposal as "too foolish", questioning why the project party wants to hold Bitcoin for users instead of opting for "more rational short-term debt assets". Meanwhile, the community is also falling into panic over the potential sell-off pressure on ADA, with some users in the forum stating bluntly: "Are you asking us to delegate our ADA for voting just to exchange it for other coins?"

Despite Hoskinson's argument that the market depth is sufficient to absorb the selling pressure, this does not completely quell concerns. This matter is not over yet, and on the other hand, adding fuel to the fire is the resurfacing of old allegations against Hoskinson - a transfer record involving 318 million ADA from the Allegra hard fork in 2021 has been re-examined, raising questions about whether Hoskinson had abused the genesis key to secretly allocate funds, with a cumulative amount close to 600 million dollars. NFT artist Masato Alexander pointed out that this transfer is "extremely unusual" and directly stated on social media that "on-chain records do not lie."

In response to the accusations, Hoskinson expressed that he was "deeply hurt" in mid-May, stating that most of these ADAs had already been redeemed by the original buyers, and the remaining portion had been donated to the Cardano governance organization Intersect. He said, "We will release the complete audit report in mid-August." He also added that he would consider handing over his social media to a professional team to avoid emotional responses that could lead to collateral damage.

Charles Hoskinson's previous live broadcast footage

In fact, this is not the first time Hoskinson has faced public skepticism. As early as 2022, Laura Shin, the author of "The Cryptopians," accused Hoskinson of exaggerating his education and background, claiming he does not have a doctoral degree and had previously asserted to others that he had collaborations with the CIA or DARPA. "This book is a decent piece of fiction," Hoskinson replied, "but it doesn't quite measure up to Tolkien."

These trust crises have cast a shadow of "founder intervention" over this funding event—although the funding itself was completed through on-chain governance, in the eyes of many observers, all decisions regarding Cardano still cannot escape Charles's will.

This "binding of personality and protocol" is not only the reason why Cardano can maintain consistency in long-term development but may also become an obstacle to its path toward true autonomy. Nowadays, as Hoskinson begins to try to delegate more authority to Intersect and on-chain voting mechanisms, he himself is also on the path of transformation from "ruler" to "spiritual symbol."

Whether this transformation is thorough enough, and whether Cardano can withstand the painful test from "charismatic leadership" to "institutional autonomy," will gradually be revealed in the upcoming market feedback and ecological evolution.

Market Follow-up: The Reconstruction of On-chain Ecology and the Formation of Pragmatism Route

Compared to controversies and emotions, the data on the chain remains calm, even cold. They do not speak of feelings, only recording actions. From a series of recent governance events and treasury allocation actions, we may see a clear trend signal: Cardano is moving from conceptualization to pragmatic execution.

This signal is first reflected in the changes in asset structure. The Cardano Foundation disclosed that as of July, the total value of its held crypto assets increased to $659.1 million, with Bitcoin's share rising to 15%, while the share of ADA decreased to 77%. In other words, the foundation itself has begun to reduce its single reliance on the native coin and is shifting towards a more robust asset allocation structure.

This echoes, to some extent, the concept of "non-inflationary revenue sources" proposed by Hoskinson, and indirectly counters the community's concerns that "the coin swap proposal will harm ADA prices": the reality is, they have already started doing this.

At the same time, changes are quietly happening on the DeFi layer of Cardano. In June 2025, Hoskinson announced the launch of the Bitcoin DeFi protocol Cardinal, which implements cross-chain non-custodial support based on MuSig 2 multi-signature, allowing BTC to participate in staking, lending, and trading operations on the Cardano chain, and is compatible with Ordinals inscriptions as collateral assets. The protocol will also integrate a zero-knowledge proof system to enhance liquidity and interoperability.

This marks the first time Cardano has opened the liquidity entry for Bitcoin assets at the technical level, which also means that its ecological strategy has shifted from "building a closed academic public chain" to "embracing cross-chain compatibility with mainstream assets." In other words, Cardano is no longer trying to carve out its own track but is attempting to participate in the DeFi world dominated by Bitcoin and stablecoins.

In terms of governance structure, the first phase of the Chang hard fork has basically been completed. The DRep representative registration channel has been opened, the SanchoNet testnet is operating stably, and the Intersect implementation of a member-based development collaboration mechanism signifies that on-chain governance of Cardano has moved from framework design to the stage of practical execution. Governance authority is also gradually transitioning from core development teams like IOG to community governance and treasury proposal systems.

In multiple indicators, Cardano has shown a top-down consistency adjustment: a more robust asset structure, a more open technical ecosystem, and a more autonomous governance mechanism. The underlying logic of all this is its attempt to build a system-driven long-term incentive model that allows on-chain governance to truly break away from the "will of the founder" and operate in a direction that is institutionalized and sustainable.

Ultimately, the effectiveness of this transformation still needs to be observed through two key indicators: first, whether the stablecoin TVL can increase from the current 10% to 30%-40%; second, whether the community can continuously produce DRep governance decisions that possess consensus and quality.

Conclusion: Cardano's second "self-definition" opportunity

In a sense, this is not the first time that Cardano has "self-defined," but it may be the most crucial one.

In 2017, Charles Hoskinson founded Cardano, choosing to bypass Silicon Valley, reject venture capital, and start from academic norms to build the consensus model Ouroboros. He hoped that Cardano would become a rational system that does not rely on personal branding and does not chase cycles—this was the first self-definition: not following the ETH route, not catering to the DeFi craze, but rather achieving stability through slowness.

And now, after the transfer of governance authority, allocation of treasury funds, and updates to ecological planning, Cardano has entered its second self-definition phase: no longer a "project led by Hoskinson," but as an existence of the governance structure itself, it begins to operate independently of individual will.

From asset structure adjustment, DeFi integration with mainstream assets, to the advancement of CIP-1694 and the autonomous mechanism of Intersect, Cardano is implementing a series of technologies and systems to shed external labels such as "symbol chain" and "zombie chain." It no longer emphasizes crypto ideals but chooses a slow yet clear path—replacing emotions with systems and responding to criticism with practice.

Charles Hoskinson himself is gradually stepping back: from CEO to system designer, now turning to ranching, healthcare, and extraterrestrial exploration. What he leaves behind is an autonomous system that can be driven by representative voting and operated through treasury governance.

Funding is not the end point, but a verification of the self-rotation of the system. When one day Cardano can continue to evolve without any central leadership, Hoskinson's name will also exit from being the "executor" and remain in the logic of the system itself.

This might be the "Voltaire moment" he has truly been waiting for.

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