Cardano almost shut down its own engine...Core development team funding war on the verge

▲ Cardano (ADA)/ChatGPT generated image

In the cryptocurrency market, which is experiencing a prolonged downturn, a proposal to fund the core development of the Cardano (Cardano, ADA) ecosystem narrowly avoided rejection, putting its governance system to the test. Concerns grew that the momentum of the core development team could be cut due to cost-cutting logic, but community sentiment quickly shifted just before the deadline, reviving the possibility of consensus to maintain long-term scalability competitiveness.

Dan Gambardello, host of the crypto-specialized YouTube channel Crypto Capital Venture, pointed out in a video released on May 23 (local time) that DReps, key representatives of Cardano's governance, pushed a development funding proposal for Input Output, the core development company, to the brink of rejection, putting the entire ecosystem at a critical crossroads. Up until two days before the deadline, the approval rate for the governance proposal to fund Input Output remained in the 20% range. Gambardello assessed that if this trend had continued, it would have been an emergency situation where Cardano's development engine could have stopped. He explained that while DReps raised legitimate concerns, demanding transparency in fund execution and disclosure of overhead details, they came close to a dangerous choice of dismantling the core development team in a bear market, and the community corrected its direction in real-time as the approval rate rose to the 60% range just before the deadline.

This funding rejection crisis is interpreted as a business misjudgment stemming not from Cardano's own failure, but from the prolonged crypto downturn and the decline in ADA prices shaking investor sentiment. Compared to their peaks in December 2024, Chainlink (LINK) has fallen 68%, Sui (SUI) 79%, Cardano 81%, and Avalanche (AVAX) 84%. This trend is closer to the impact of a 4-year cycle of long-term stagnation suppressing the overall altcoin market rather than a defect in a specific project. Removing the illusion of price charts and looking only at on-chain fundamentals, Cardano is evaluated as a network with strengths in stability, decentralization, and systematic construction in the cryptocurrency market.

Concerns were also raised that if the Cardano community prioritizes cost-cutting and pushes out its core development team, it could suffer a greater blow than Ethereum (Ethereum, ETH), whose narrative has been shaken by recent talent outflow. Even in the Ethereum ecosystem, which has maintained its position as the second-largest by market capitalization, there has been a continuous departure of researchers from the Ethereum Foundation. Furthermore, it was pointed out that the bullish narrative weakened when a co-founder of Bankless, a major Ethereum media brand, sold all his Ethereum holdings and carried out layoffs. The loss of key development talent is seen not as a short-term cost saving but as a signal of long-term value erosion and ecosystem stagnation.

For Cardano to maintain its identity as a non-venture capital chain, the community must directly bear development costs even during a recession. Cardano developer Adam Dean emphasized that the Input Output team, which has worked together for years to design and build the Cardano ecosystem even in a bear market, is the most efficient entity for executing the common vision. Cardano is not structured to rely on large venture capital funding, so there is no external source of funds to cover salaries during a crisis. Losing core development momentum in the process of seeking a team that offers lower costs could actually weaken its competitiveness in three years.

There is also a growing call for Cardano to move towards true governance independence by reducing immediate division and investing funds in stagnant Layer 2 scalability technology and developer tool innovation. While Cardano's consensus algorithm upgrade has successfully entered its final stages, the development of Layer 2 scalability solutions, which will determine future competitiveness, is not yet complete. Metrics related to the smart contract language Plutus and developer experience also remain in the 30% approval range, failing to gain momentum. The demand for transparency is a core principle of governance, but choosing to cut off core development momentum could lead to weakening the long-term competitiveness of the Cardano ecosystem.

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