Charles Hoskinson, co-founder of Cardano, recently addressed what he considers widespread misinformation regarding the staking mechanism for ADA, Cardano’s native token.
Contrary to claims suggesting that ADA tokens are locked in staking pools and cannot be sold, Hoskinson clarified that the network allows for liquid, noncustodial staking. This system ensures that ADA holders retain full control over their tokens, even while participating in staking.
Hoskinson debunks staking myths
The issue surfaced following a podcast where crypto influencers such as CTO Larsson and MartyParty discussed various cryptocurrencies, including Cardano. During the podcast, it was inaccurately stated that ADA’s significant market cap was due to a deceptive staking system that locks in investor tokens. Hoskinson responded on the social media platform X, emphasizing that ADA staking does not lock users’ funds, allowing them to sell their stake freely.
“The misinformation about Cardano has reached epic levels,” Hoskinson stated. “Stake isn’t locked, but they still lie. Why does anyone trust these people anymore?” His response underscores his frustration with recurrent false narratives aimed at undermining the Cardano network.
The community backs Hoskinson’s clarifications
Following Hoskinson’s rebuttal, the Cardano community further explained the ADA staking process. Unlike other major cryptocurrencies, Cardano uniquely offers direct liquid staking without intermediaries, which is a significant point of distinction from networks like Ethereum and Solana. These networks typically rely on third-party solutions for liquid staking.
Community members on X also actively dispelled the myths, stressing the accessibility and flexibility of ADA staking. One user noted, “There is no minimum staking amount, no penalties for slashing, and no lock periods. Ownership of delegated ADA remains with the user, and the protocol directly distributes rewards.”
Market response and prospects
Despite the clarifications, ADA’s price has experienced a slight downturn, declining by 2% over the past 24 hours to $0.3366. This fluctuation comes amidst discussions in the cryptocurrency community about ADA’s price performance and market cap, which has been relatively stagnant, hovering between $0.3 and $0.4. The overall decline in ADA’s value by 45.92% year to date has been stark, especially compared to the performance of other major layer-1 networks.
Cardano ADA Price (Source: Tradingview)
Transaction volumes on the Cardano network have seen a recent uptick, likely spurred by introducing a new memecoin deployer, Snekfun. This increase in activity brought about a 6% gain in ADA’s value over the past week, although the long-term impact remains uncertain.
A contentious proposal to burn 1.5 billion ADA from the treasury was met with resistance, including from Hoskinson. Stakeholders are divided on whether reducing the token supply would lead to a sustainable increase in ADA’s market price.
By directly addressing these misunderstandings, Cardano aims to foster a more informed and transparent dialogue about its technology and staking model in the volatile and often speculative crypto market landscape.