Cardano Ecosystem, Conflict Explodes Over Governance..."No More Reckless Spending"

▲ Cardano (ADA)

A deepening conflict is brewing among stakeholders within the Cardano (ADA) ecosystem over how treasury assets are spent. Participants in governance warn that indiscriminate fund execution could harm the long-term sustainability of the ecosystem.

According to cryptocurrency media outlet The Crypto Basic on April 30 (local time), Cardano Stake Pool Operators (SPOs) recently expressed strong concerns about the treasury spending plans. They are feeling fatigued by the continuous requests for project funding and assert that strict financial discipline in treasury management is urgently needed. This conflict is particularly sensitive as Cardano enters the Voltaire era, where community-led decision-making becomes crucial.

SPOs point out that Intersect's current method of requesting funds, which manages the treasury assets, is inefficient. They criticize the lack of thorough verification on whether large-scale projects receiving significant assets are actually yielding tangible results. One operator emphasized, "We cannot stand by and watch community assets be wasted." He added that all fund executions should be based on clear criteria and performance indicators.

The Cardano treasury holds vast assets accumulated through fees generated during network operations and inflation. These funds are designed to be used for research and development to foster ecosystem growth. However, concerns about asset depletion are emerging as spending has rapidly increased recently. Critics warn that if the current spending rate continues, there may be insufficient reserves to support network stability.

At the heart of the conflict lies the issue of transparency and efficiency in fund execution. The Cardano community demands the establishment of specific guidelines for treasury operations. There are also strong calls for improvements to the governance system. Projects requesting funds now face the challenge of proving what tangible value their proposals can add to the ecosystem. This controversy is considered a necessary hurdle for Cardano to overcome in its journey to build true decentralized governance.

The Cardano Foundation and related organizations have stated their intention to review the spending process by incorporating community criticisms. However, given the significant differences in perspectives among stakeholders, reaching a consensus is expected to take considerable time. Internal growing pains surrounding treasury asset management are likely to continue until the governance system is firmly established.

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