The lack of “ponzinomics” is causing venture capitalists to look elsewhere. However, as Cardano’s dApp ecosystem flourishes, Hokinson anticipates VC funding.
During Mainnet 2022 in New York, Hoskinson discussed misconceptions about Cardano. Discussion themes included the advantages of beginning with a Bitcoin basis (UTXO), gradual, deliberate methods that have explored upgradeability pathways before they were required, and the intricacies of smart contract design.
Nonetheless, Hoskinson’s perspective on venture capitalist money was particularly intriguing. Hoskinson revealed to a passive-aggressive Ryan Selkis, co-founder of the research platform Messari, why some VCs disregard the Cardano ecosystem.
The CEO of Input Output (IO) stated, “The problem is that we didn’t have any ponzinomics for them,” before explaining that venture capitalists pursue short-term profits by unfairly dumping early distributions on retail bag holders.
Hokinson provided an anonymous example that debuted on the market with a high value to illustrate his argument. This was quickly followed by insiders selling their tokens, resulting in a price decline that made early investors wealthy (er).
What transpired with EOS mirrored Hoskinson’s account. It’s 2018 year-long $4.4 billion initial coin sale remains the highest fundraising to date.
Given Cardano’s “egalitarian token distribution,” such opportunities do not exist, causing venture capitalists to overlook the project.
It was a fair distribution of Cardano, it has a high Gini coefficient, and it is one of the most widely distributed currencies…Therefore, there was no insider distribution to sell.
The Gini coefficient is a measure of the distribution of wealth. In cryptocurrency, it is used to measure a chain’s degree of centralization, with a value of 1 indicating absolute inequality and a value of 0 indicating perfect distribution.
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