The remarks made by Charles Hoskinson could even have legal repercussions. In a YouTube video posted on October 12, he directly accused Cardano Foundation president Michael Parsons of nepotism, citing the presence of Parsons’ wife and son within the Foundation’s offices.
Hoskinson’s direct criticism is not isolated: on the IOHK development company blog — where Hoskinson serves as CEO — there is a lengthy open letter to the Cardano community co-signed by Ken Kodama, CEO of Emurgo.
The Cardano Foundation has become a monarchy
In the video Hoskinson accuses Parsons of nepotism; in the open letter he characterizes him as a monarch. After two members of the foundation’s board resigned, no replacements were elected, leaving Parsons effectively alone in decision-making.
This “monarchy” situation has persisted for 15 months, since July 14, 2017, the day the last of the board members stepped down.
Hoskinson’s concerns also extend to the millions of dollars managed by the Foundation, funds intended to support community projects. Recently no community projects have received funding, and the Foundation has not launched any Cardano ICOs. Instead, those funds were invested in the Distributed Futures program, about which little information is available and whose benefits for Cardano as a protocol and ecosystem remain unclear.
These are serious allegations — and there’s more.
IOHK and Emurgo dissociate from the Cardano Foundation
In the video, Hoskinson is blunt: IOHK and Emurgo will no longer work with the Cardano Foundation. Development work on Shelley, scheduled to reach full operation in 2019, will continue along the roadmap but without the Foundation’s endorsement or support.
Addressing community members, Hoskinson suggested the Foundation may be unnecessary, comparing the situation to the Bitcoin community where the Bitcoin Foundation’s views do not determine code development.
What are the consequences for Cardano’s future?
For readers unfamiliar with Cardano, it’s useful to review the project’s structure. The Foundation’s official role is limited: it promotes the decentralized system and coordinates the international community.
In practice, IOHK and Emurgo are responsible for developing Cardano and the ADA cryptocurrency. Developers, researchers, engineers and scientists at those organizations build the protocol and drive technical progress.
In other words, if the Cardano Foundation has become effectively a single-person operation managed with family members, the community could sideline it and create a new, plural, representative and transparent entity. Hoskinson emphasized these three characteristics — plurality, representation and transparency — several times during the approximately 13-minute video.
Cardano in the financial markets
Despite the internal governance turmoil at Cardano, markets appear to have been largely unaffected. Investors continue to buy Cardano ADA as if nothing significant has changed.
