Charles Hoskinson says Cardano’s 2026 budget debate has shifted from “should we fund the ecosystem?” to “how should we fund it?”
In a March 10 video, the Cardano founder argued the protocol has long overemphasized core infrastructure while underinvesting in the applications, user experience and storytelling needed to convert technical capability into real-world adoption. That imbalance, he warned, now risks leaving many projects unable to sustain themselves.
Three layers, one problem
Hoskinson laid out Cardano as three layers: infrastructure (nodes, languages, scaling solutions such as Hydra), utility (DApps and DeFi primitives) and experience (wallets, onboarding, content and brand). He said the treasury and Catalyst have historically skewed toward infrastructure at the expense of utility and experience.
“Not enough money for experiences, not enough money for utility […] there’s not a lot of money for the content creators. There’s not a lot of money for the people actually building the interfaces into Cardano utilities,” he said.
A blunt ecosystem scorecard
To make the point, Hoskinson pointed to traditional health metrics—monthly active users, total value locked (TVL), daily transactions and revenue—and delivered a stark assessment: Cardano’s DApps and DeFi projects generally aren’t performing well on those fronts.
“All of these on Cardano, they’re not doing well. You’re lying if you say they are,” he said. “There are a lot of DApps and DeFi in the Cardano ecosystem that are losing money. They don’t have a lot of users. They don’t have a lot of TVL.”
From grants to investments
Rather than more conventional grant-making, Hoskinson proposed a treasury-backed investment model. Instead of “free money,” he suggested creating a weighted index of selected ecosystem tokens and taking equity-style stakes in funded projects. In exchange, projects would accept oversight, tighter operating discipline, strategic alignment and partial revenue-sharing back to the treasury—potentially by buying ADA.
“No free money. Sorry, that’s bad behavior,” he said. “It is a strategic investment. You give something, you get something.” Hoskinson said the treasury could reasonably expect to recoup initial outlays over time, estimating a payback horizon of “probably one to three years” as usage and valuations recover.
Consolidation ahead
That investment approach implies a politically fraught consequence: consolidation. Hoskinson argued Cardano cannot sustain dozens of overlapping products at current adoption levels—particularly in DeFi—and will need to “pick winners and losers.”
“We can’t have 25 DEXs at our current adoption level in volume. It’s not sustainable,” he said. “There needs to be a consolidation by category one to three.”
Experience, brand and the “uncool chain” problem
Beyond utility, Hoskinson emphasized the neglected experience layer. He said Cardano has not properly compensated ambassadors, influencers and content creators, leaving the project vulnerable to a negative narrative.
“Cardano is considered to be the uncool chain,” he said. “Ghost chain. Nobody uses Cardano. Cardano is a dead project […] Why do you hear it? You hear it because there’s nobody on the other side of the argument.”
He called for better wallets, simpler onboarding, stronger aggregator channels and deliberate marketing. Hoskinson also recommended focusing Cardano’s strategic identity on niches where it can realistically differentiate—he cited Bitcoin DeFi and privacy—rather than trying to outcompete larger rivals on raw user counts or liquidity.
A governance test
Hoskinson framed the debate as a governance moment: the community must stop treating every treasury request as a fragmented bidding war and begin acting with coordinated intent.
“It’s not an infrastructure game anymore,” he said. “It’s a utility and experience game.”
Market snapshot
At press time ADA traded at $0.2590.
Why it matters
Hoskinson’s proposals would shift Cardano’s funding model from grants to investment-minded stewardship, push the ecosystem toward consolidation, and demand a bigger focus on UX and narrative. For projects, that could mean tougher oversight but more strategic capital. For the treasury, it’s a bet that smarter allocations—and stronger branding—can turn infrastructure into sustained adoption.
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