Does Cardano
really "want to win"?

TL;DR

This debate in three lines

The core that the speakers argued most passionately boils down to these three points.

Contents

Contents

01 ・ Background

Background: What is this debate?

First, let's establish what kind of setting this recording comes from.

This is a live audio debate (a Space) where volunteers from the Cardano community gathered. Centered on host Esco, participants include Phil, who backs the DeFi consultancy AlphaGrowth; the more practitioner-minded Rizzo; Riley, who offers a market view; John Kravitz, who argues from a business standpoint; and Micro (Michael), who develops Cardano's privacy layer Midnight.

The atmosphere is extremely casual, and roughly half to 80% of the debate is small talk (soccer, food, rap, inside jokes). This document strips that out and reconstructs only the substantive discussion of Cardano, DeFi, and governance.

What this document "extracted"

Of the 4 hours and 49 minutes, the bulk is small talk (soccer, food, rap, inside jokes). This document pulls out only the substantive points and reconstructs them. Here is a rough breakdown.

What keeps this discussion from being mere insider griping is that behind it lies an actual governance vote in progress (the AlphaGrowth proposal and the NCL expansion). "Does it want to win?" is not an abstraction—it ties directly to the concrete decision of how to spend treasury funds right now (see Chapters 3–4).

02 ・ Core Thesis

Core thesis: Do you want to win, or to survive?

The biggest claim running through the debate is "operate as a business, not a charity."

The core of Esco and others' argument is clear: "Every expenditure needs an ROI (return on investment). The moment something stops generating returns, that line should be cut." Yet Cardano's treasury, they argue, funds mostly "experimental, dreamy" projects with no track record while refusing reliable, commercial spending—which they criticize as acting like a charity rather than a business.

The point is then lowered from "win" to "survive." Until the U.S. Clarity Act (a bill to clarify crypto-asset regulation) passes and mainstream adoption arrives, Cardano needs to stay alive. As the saying goes, "no matter how technically superior it is, if it dies, no one cares."

Three keywords underpin this argument: "ROI (return on investment)," "exit criteria," and "accountability." A business would have all three as a matter of course, yet they are missing from Cardano's capital allocation—so under "wisdom of the crowd"–style governance, funds keep flowing with neither verification of effect nor any exit. That is the backbone of the critique (see Chapter 7).

03 ・ AlphaGrowth

What is AlphaGrowth?

The concrete focus of the debate. A proposal that embodies "choosing by track record."

AlphaGrowth is introduced in the debate as a DeFi consulting firm. Phil's side explains that over several months they vetted firms with a track record of growing DeFi ecosystems on other chains and selected this one. Its pitch is "the DeFi consultancy that the major blue-chip protocols have all used"—campaign track records with Uniswap / Compound / Arbitrum / Consensys and others are cited.

The selection methodology: two metrics

Phil says he examined the top 30 apps on DeFiLlama, identified every consultancy they use, and compared their past campaign histories. He emphasized these two metrics.

As a specific example, it is claimed that Compound's campaign attracted $900M in TVL, of which about $795M remained even several years after incentives ended (= high retention). The debate repeatedly makes the case that a partner who has "done it 50 times successfully and will do it a 51st" is a more fiscally responsible spend than one with no track record at all.

So how would it actually proceed (the "Cardano Prime" proposal)?

The debate covered not just "safe because of the track record" but also the approach. The crux is "not to 'supply' liquidity outright, but to 'attract' activity"—specifically, a design that draws in stablecoin liquidity via a subsidy to LPs (liquidity providers) to pull new capital into Cardano. Hyperliquid's large-scale airdrop was cited as a success case.

And the concrete shape of the actual proposal submitted (formally Cardano Prime / PRIME) is as follows.

In sum: how AlphaGrowth would "revive" Cardano (spinning the flywheel)

Putting the steps so far into a single picture, it looks like this. AlphaGrowth's aim is not to build DeFi apps itself, but to give the stalled "flywheel" an initial external push and then let it run on its own. Think of it as reversing the vicious cycle (Fig. 7) in which DeFi fails to grow into a spinning virtuous cycle.

• The push at ① = the subsidy is not a perpetual giveaway but a "cold start." Hyperliquid's large airdrop is cited as a success case.
• The target is stablecoin liquidity: ADA pairs bleed away through impermanent loss (IL), but between stablecoins there is almost no IL, making the liquidity more likely to "settle in."
• The decisive factor is "stickiness": whether capital stays after rewards end. Compound's "$900M attracted → $795M retained" is offered as evidence that it kept running after the push.

To be honest: the half that's solvable and the half that isn't

For this flywheel to truly run on its own, the injected capital needs somewhere to "go to work" (sophisticated apps that generate high yields, composability, real demand). And what Cardano lacks is precisely that app layer. So success or failure hinges on whether both halves come together.

04 ・ Treasury & NCL

The NCL (Net Change Limit) and the Treasury

The governance spending cap that became the "premise" of the AlphaGrowth proposal.

The NCL (Net Change Limit) is described in the discussion as something like "Cardano's budget cap." It is a governance parameter that sets an upper limit on the total amount that can be withdrawn from the treasury over a given period. In the discussion, it is said that the NCL is nearly used up because too much was paid out to "junk projects with no prospect of becoming self-sustaining."

Because AlphaGrowth's request (cited in the discussion as around 120M) exceeds what remains in the NCL (roughly 50M–60M), a proposal to expand the NCL was first submitted as a "precursor" — that is the setup. However —

Why it is "depleted" now — the treasury viewed in dollar terms

Another key point is that the treasury is denominated in ADA. When the ADA price falls, the same number of ADA is worth less in dollar terms. In the discussion, it is said that Catalyst once handed out $50M–70M in a single fund, which at the ADA price of the time represented a large amount of ADA. Esco offers a sharp critique: "Catalyst has been running 'experiments' for 15 seasons on other people's money. On your own money it wouldn't last two seasons."

05 ・ Why DeFi Failed

Why Cardano's DeFi Struggled

"Providing liquidity and attracting it are different things" — this is the most important technical point.

The core of Rizzo's point is the conflation of "provision" and "incentive" of liquidity. Under past NCLs, a scale of around 50M was deployed by simply "providing" liquidity to a Cardano that had little activity and little foundation. But liquidity placed where there is no activity gets eaten by impermanent loss (IL), and ends up as "exit liquidity" — that is, funds for others to escape with — melting away, the argument goes.

Another pitfall is "mercenary liquidity." When the incentive design is weak, gaming (abuse) can occur — for example, the founding entity itself supplies most of the liquidity and extracts the rewards through wash trading.

Concrete examples: the Strike contradiction and the Pentad lesson

The discussion also cites concrete past examples — not abstractions, but things that actually happened.

• DRep inconsistency: DReps who provided 9–10M ADA of liquidity to Strike (an established, real Cardano DeFi protocol) are opposing AlphaGrowth, which is expected to have a larger effect — the frustration is with that inconsistency. This is not a knock on Strike itself (if anything, it's the side that successfully received liquidity).
• The Pentad lesson: last year's "bring USDC and everyone will come" idea did not generate the activity people hoped for. Merely placing assets is not enough; it takes relationship-building and dialogue — a lesson (= the importance of "attracting" in Fig. 4).

Both are cited as examples that reinforce the core of Chapter 5 — "merely providing does not make money work."

06 ・ Activity > Tech

The "Activity, Not Technology" Thesis

The claim that what carries Ethereum is not L1 but the "app layer."

Phil's point is provocative: "It is not Vitalik carrying Ethereum. It is the app layer." Ethereum's L1 is slow (around 20 TPS) and its scaling has not advanced. And yet it has the most TVL, transactions, and activity because money-making apps like Uniswap / Aave / Curve / Morpho / Compound run on it, he says.

Conversely, if excellent apps like Morpho or Ethena came to Cardano, it wouldn't matter that the L1 is weak — since LPs just deposit funds at around 20% APY, high-frequency processing is not essential, the logic goes.

The star of modern DeFi is the "Vault"

Phil emphasizes that most of DeFi's money is in Vaults (automated-strategy vaults), not meme day-trading. Coinbase Earn and Kraken Earn are backed by Morpho Vaults behind the scenes, and users don't even realize they are using DeFi, he notes.

Esco attributes Solana's rise to "gamifying activity." Volume, TVL, transaction counts, and daily actives were deliberately built up to land high on DeFiLlama. Since users choose from the top 5 chains, "if you don't play the KPI game, you don't even get to enter the race," the argument goes.

The metaphor repeated in this context is "you don't build a gas station on a road with no cars." Open a shop on a road with 10,000 cars a day and you profit — so first create the activity (traffic), the argument goes.

Do the "500,000 users" numbers add up? — the CAC pitfall

Esco takes issue with a proposal's claim of "acquiring 500,000 users." The industry-average CAC (customer acquisition cost) is around $150 per person. 500,000 people × $150 = about $75M, which is orders of magnitude off from the proposal's budget (around 9M ADA ≈ $2.5M) — "either it's a lie, or the math doesn't work," he cuts.

07 ・ Governance

Problems with Governance

A sharp critique of "information asymmetry" and "the wisdom of the crowds."

What frustrates the speakers most is the decision-making of DReps (delegated representatives). By their account, a DRep holds only about 2–5% of the total information on any given proposal—skimming the proposal text and doing surface-level searches at best. Phil, meanwhile, holds roughly 80–100% of the information about AlphaGrowth—yet, they say, "nobody asks Phil."

The causes of bad votes are boiled down to two. ① A lack of information (= fixable), or ② an idealistic, "naive" mindset / a "1 ADA is 1 ADA" way of thinking (= hard to fix). The latter, "1 ADA is 1 ADA," is a governance ideal often invoked in Cardano circles, but the speakers criticize it as a notion that lacks commercial rationality.

Esco traces the root cause to "wisdom of the crowds"-style governance. There is no strong decision-maker, no accountability, and no budget allocation (e.g., earmarking 15% / 20% for something)— the basic principles of business are missing, he argues. "Catalyst has run $25–50 million 'experiments' with other people's money across 15 seasons, but with its own money it wouldn't last two seasons," he charges pointedly.

Esco goes further, floating the idea of quantifying the yes/no vote results to build a "philosophical benchmark" of whether the community leans toward "commercialization" or "idealism." At the root is frustration with the absence of "basic management principles" such as budget earmarks (e.g., 15% for this, 20% for that) and exit criteria.

08 ・ Midnight

Midnight: The Flagship Use Case

Not all criticism. A foundation looked to as Cardano's "path to winning."

One of the few sources of positive expectation in the debate is Midnight. Johnny calls it "potentially one of the best protocols ever." That is— privacy-preserving digital ID, a way to own your own data (= the opposite of an Orwellian surveillance society), and the ability to build dApps that are auditable while preserving privacy on Cardano.

• A design philosophy aiming to reconcile privacy protection × auditability
• The read that Charles (Hoskinson) conceived it after trying to mend the relationship among the three founding entities (IOG / CF / Emurgo)
• A structure that could be spun out and separated from Cardano proper if needed, though those involved do not want that
• The expectation that "if BlackRock gets on Midnight, everyone will want Cardano"
• On the other hand, wariness that the Ethereum camp, with deeper pockets, is "imitating" Midnight/Cardano privacy research

Midnight's "selling point": reconciling secrecy × auditability

The crux of Midnight is its attempt to make two things that are usually at odds—"secrecy (privacy)" and "auditability (compliance)"—hold true at the same time. That is precisely why it could become a "flagship use case" usable even in the world of enterprises and regulation, the hope goes.

Concretely, it seeks to realize privacy-preserving digital ID and a way to own your own data (= the opposite of an Orwellian surveillance society) on the blockchain. Micro, the developer of the Genesis Night token, is in this camp, and there was a self-referential note that the people who look like the debate's "trolls" are in fact the very ones building this kind of foundation.

Relatedly, there is a mention of Phil's own L2 project Midgard (an open-source foundation that lets anyone launch an L2). Its public testnet was "about two months away" at the time of the debate, with the scaling technology Leios also on the way.

09 ・ Market & RWA

Market View and RWA (Real-World Assets)

"Why DeFi/RWA matters most right now"—from market timing to the large tide of institutional money.

This is the part many people care about most: "So, when and what should I actually pay attention to?" The debate covered it on three layers: ① market-cycle timing, ② where to place your investment thesis, and ③ RWA (real-world assets) as a major tectonic shift. Let's take them in order.

① Market-cycle timing (Riley's view)

Riley, having said he bought BTC near the lows (low-$60K), sketches the near-term scenario like this: a relief rally back to as high as around $70K → then a pullback toward around $50K, or a bottom as a "time-based capitulation" that ranges around $60K–$65K for several months.

• Rough bottom timing: for many coins the bottom is October, at the latest January. Names that can't bottom past that point are dangerous—that's the time frame.
• Signs of a bottom: watch pairs like HYPE/BTC and BNB/BTC as indicators. Like BNB in the prior cycle, when these top out against BTC, read it as the signal that "BTC has bottomed."
• Where ADA stands: like many other L1s, ADA moves by riding the overall market wave (there is little in the way of a strong, distinct catalyst of its own)—a sober assessment.

② Investment thesis: a return to "tokens that give revenue back"

What Riley and others favor is not BTC/ETH themselves but protocols that generate real revenue from fees and the like and return it to token holders. The point isn't "is it equity or a token, ambiguously"—it's that the source and distribution of revenue are transparent. Here is the lineup they named as worth watching.

What matters is that these have started to re-rate upward even while BTC declines—re-rating—and that TradFi (traditional finance) money is starting to buy. The point is that a crowd that once whipsawed on speculation is turning into buyers who buy "on the revenue."

③ RWA (real-world assets) as a major tide

And the biggest context is RWA (tokenization of real-world assets). The underlying worldview is that the blockchain is ultimately infrastructure, and it is inevitable that real-world assets ride on top of it. In fact, JPMorgan, Fidelity, Franklin Templeton, and BlackRock are running on-chain programs in parallel with existing financial rails, the speakers say.

Why "inevitable"? The debate frames it on a 10–15 year time horizon. Once the blockchain proves it is "fast, cheap, and 24/7/365," international remittance and FX (foreign-exchange) settlement, along with real yield— for example the yield on U.S. Treasuries, or DEX yields between like-kind assets (alETH↔ETH, USDC↔USDT, and the like)— will increasingly be realized on-chain, the story goes.

Profit vs. ecosystem growth (the Esco × John Kravitz clash)

Another axis of conflict, rich in implications, is "profit vs. ecosystem growth." Where Esco says "making money always comes first," John Kravitz counters that "if you're making money but the ecosystem isn't growing, you're just shrinking it." The logic is that a project that only takes fees without bringing in new capital merely eats away at the pie.

As his practice of this, John lays out a concrete two-stage strategy.

Their RWA product is a "unicorn-class" flagship (seven-figure-dollar revenue potential), but because Cardano lacks users and activity, they have no choice but to launch multi-chain—a candid admission. Here the next memorable line lands.

That is exactly why activity must be injected from outside via incentives (= AlphaGrowth) to break this loop— which ties into the main argument. It's a matter of first sending cars down "a road with no traffic." Placed alongside the virtuous cycle (Fig. 8) in Chapter 3, the whole document's skeleton fits on a single page.

10 ・ The Hyperliquid Lesson

The Hyperliquid Lesson

Even with similar products, the winner was decided by "which market you launched in"——the lesson that lands most squarely for Cardano.

This is the part that speaks most directly to the title "Does Cardano want to win?" Why did Hyperliquid (an on-chain perpetual-futures exchange) succeed so dramatically? The debate's conclusion is simple: "Not because the product was head and shoulders above the rest. Because the 'market' it launched into was good."

Why Hyperliquid won (breaking down the win)

• It launched in a place with "thick" EVM-centric liquidity (it opened a shop on the road where the money flows).
• A native bridge made moving funds in and out easy (none of the friction of something like IBC).
• The gap came not from product superiority but from the accumulation of these "choices about the launch environment."

Flip it around, and this is a lesson about "the disadvantage of launching in a low-activity market (= today's Cardano)." However good the product, put it on a road with no traffic and it gets buried——which connects in a straight line to the main argument: so create the activity.

Aside: the dispute over Hyperliquid's "origins"

In the debate, the discussion also got heated over Hyperliquid's roots. Including how hard it is to verify, here's how it shakes out.

Three models for "what you do with volume"

This is a way of sorting projects by "what they do with" the volume an exchange generates.

Overall ・ Our take

Overall assessment: how to read this proposal

It's a high-energy, one-directional discussion, but the key points can be assessed calmly. We lay out both the strengths and the still-open questions, flatly and side by side.

This audio is a passionate pitch from a position that backs AlphaGrowth. Some momentum-driven numbers and turns of phrase are mixed in. Even setting those aside, the skeleton of the diagnosis (a shortage of activity) and the prescription (attract, then retain) is fairly coherent. At the same time, "unsettled" parts remain that will determine whether it actually works. Looking at both before judging is the fair approach.

🔢 Take the fine-grained numbers with a grain of salt (the main thread stands). Examples of momentum numbers stemming from the transcript:

Glossary

Glossary

A roundup of the key terms that came up in the debate.

Sources & Links

Sources & speaker links

The primary sources and the X accounts of the main speakers. As a starting point for going straight to the people and the originals.

Main speakers (X)

AlphaGrowth (the proposing party)

• Proposal: Cardano Prime (PRIME) — handled by AlphaGrowth's Bryan Colligan / Eric Waisanen and others
• Company site: alphagrowth.io
• Community discussion: Cardano Forum "Can AlphaGrowth Fix Cardano DeFi?"