Cardano ADA is the world’s 9th most valuable cryptocurrency. Impressive though this is, there seems to be trouble brewing among Cardano leadership, and investors and analysts are ever more wary about Cardano’s sluggish development. Breaking the silence, ADA Co-Founder Charles Hoskinson and Ken Kodama launched multiple criticisms against the Cardano Foundation in an open letter.
What does this mean for Cardano and the price of ADA? Nobody knows yet, but this latest blockchain drama does seem to indicate a fundamental lack of understanding between some of Cardano’s most influential minds.
Hoskinson’s Open Letter
To understand the substance of the open letter, we first have to enumerate the three entities that control Cardano. First, we have IOHK (Internet Online Hong Kong), made up of Cardano’s core developers. Then we have Emurgo, a group in charge of drawing in new developer talent and of crafting new partnerships between Cardano and third parties. Hoskinson is affiliated with the first group; Kodama is a member of the second.
Then there’s the Cardano Foundation. The CF is basically in charge of community outreach. Because Cardano doesn’t have an active platform, it’s very important for the Cardano Foundation to be communicating internal updates with its investors and active community members. According to Hoskinson and Kodama, this hasn’t been happening in the way that it should, for at least two years!
We’ve distilled their criticisms into the following main points:
- The Cardano Foundation doesn’t have a plan.
- The CF has plenty of money but no clear ethical protocol for spending it in useful ways.
- The CF is not transparent.
- The CF lies (they said they own the Cardano copyright, for example).
- The CF won’t share its spending with IOHK and Emurgo.
- CF council seats have been left vacant for many months.
- There is no governance system.
In the days that followed the release of this public letter on October 12, IOHK and Emurgo both announced they would be severing ties with the Cardano Foundation. This might have been expected. After all, an “open letter” is rarely a way to improve relations. Rather, it is more often used to provide public justification for what might otherwise seem like reckless corporate action.
What Does This Mean for the Cardano ADA Price?
You can buy Cardano tokens for less than $0.08 today. Cardano prices have fallen more than 95% from their height in January 2018. Most of this price decline is due to larger market trends. But even considering this, Cardano’s fall has been especially hard. This is typically thought to be due to one main factor: The Cardano platform hasn’t been launched – and probably won’t be launched anytime soon.
This is always the elephant in the room in any Cardano conversation. On paper (a white paper, for example) Cardano is impressive. And yet, the sophistication of the creators’ vision has proven to be very difficult to achieve. How much marketing and community outreach can the Cardano Foundation be expected to achieve, when there’s no central product to push?
The Cardano Foundation may truly be at fault, and deeply so, but its performance is not the extent of the Cardano Project’s difficulties. As other smart contract platforms like Ethereum and NEO (see our NEO review) approach their second and third iterations, Cardano has yet to bring a product to market. Will this leadership drama indicate a buckling down for Cardano, or a new era of difficulty and infighting? Only time will tell.
(*Information in this article should not be taken as investment advice.)
Featured image source: Flickr