Cardano’s treasury holds a staggering 1.5 billion ADA, worth approximately $513 million. The burning question among the Cardano community is whether this substantial sum should be incinerated to boost the token’s value. This debate has polarized opinions, with founder Charles Hoskinson opposing the move and some community members, led by Big Pey, advocating for it.
The Case For Burning ADA
Big Pey, a prominent figure in the Cardano ecosystem allied with ADA staking protocol Atrium Lab and Bloom, recently stirred the pot on X with his proposal. With 39,000 followers hanging on his every word, he suggested that burning all 1.5 billion ADA could be a game-changer. Token burns are a common strategy in the crypto world, employed by tokens like Shiba Inu and Floki to reduce supply and potentially increase price.
The idea is simple: By permanently removing ADA from circulation, the supply decreases, theoretically driving up the price due to the principles of supply and demand. Proponents argue that this deflationary tactic could give ADA a much-needed boost, especially in a market where every edge counts.
Hoskinson’s Rebuttal – A Dangerous Precedent?
However, not everyone is on board with the burning proposal. Charles Hoskinson, Cardano’s visionary founder, has voiced strong objections. According to Hoskinson, burning ADA would be akin to “stealing from the people working tirelessly to build applications and advance the ecosystem.” His critique is rooted in the belief that this move would undermine the ongoing development and long-term growth of the Cardano network.
Hoskinson is not alone in his stance. DRep Jaromir Tesar, another key figure in the Cardano governance ecosystem, has also denounced the burning idea. Tesar described it as a “terrible mistake,” arguing that while a burn might have a fleeting impact on ADA’s price, the long-term effects would be minimal. He advocates for more constructive uses of the ADA, such as funding DeFi initiatives, supporting developers through new Catalyst Funds, deploying stablecoins, or enhancing marketing efforts.
Also Read: Cardano (ADA) Eyes $1 – Price Up 1.5% This Week, Bullish Patterns Emerge
The DReps’ Power – What’s Next for ADA?
Despite the opposition from influential figures like Hoskinson and Tesar, the ultimate decision on whether to burn the ADA tokens will be made by the DReps (Delegated Representatives). In Cardano’s decentralized governance model, DReps are entrusted with voting on such proposals. They represent the community’s voice and have the final say on how the treasury funds should be utilized.
As Cardano continues to evolve under community governance, the debate highlights a crucial tension: short-term price boosts versus long-term development and sustainability. Whether the ADA tokens will face the flames or be put to use in more constructive ways remains to be seen. For now, the community’s decision will shape the future of Cardano and its approach to managing its substantial treasury.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
