Tue, 4/06/2024 – 14:44
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In a recent reaction to an X post, Cardano founder Charles Hoskinson has provided a thought-provoking response to a poll concerning the security sustainability of the Cardano network. The poll’s results have sparked a discussion on the economic model that underpins the security of blockchain networks.
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Rick McCracken Digi, a Cardano SPO, launched a poll on X that asks the ADA community what they would rather rely on to sustain the future security of Cardano. Respondents had two major choices.
The first choice was the 2% inflation of ADA rewards, like other blockchains such as Ethereum, Dogecoin and Solana. The second was “20% of the inflation-generated revenue from staking other or partner chains.”
Twenty percent of respondents went for the first option, while 35.3% of respondents chose the second option. Meanwhile, a larger percentage of respondents (44.8%) were indecisive and went for the option “show results.”
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In reaction to the poll, Hoskinson pointed out a compelling statistic from the Bitcoin network, noting that 75% of the revenue generated from mining Bitcoin blocks is derived from transaction fees rather than block inflation.
Looking at Cardano, the founder’s reaction suggests a similar trajectory for the network. With millions of transactions expected to be processed using Cardano, the implication is that these transactions will fund the block producers, ensuring the network’s security and sustainability.
This model aligns with the broader shift in the crypto industry toward transaction fee-based revenue models, which are seen as more sustainable in the long term compared to reliance on block rewards.
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In response, McCracken, the Cardano community member who initiated the poll, agreed with Hoskinson’s point of view, adding that one issue that needed to be addressed was the throughput and number of users required to achieve sustainability.
