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Founder Charles Hoskinson has insisted that ADA, the native token of the Cardano ecosystem, will always remain deflationary.
In a recent podcast from Colorado, Hoskinson addressed several issues affecting the new government model in the Cardano ecosystem. One is the hanging issue surrounding the ecosystem’s treasury management.
Notably, crypto pundit and Cardano enthusiast “Angry Crypto Show” highlighted an interesting comment from Hoskinson. In a Friday tweet, he shared a clip from the podcast where the Cardano founder inferred that ADA will always be deflationary.
Working Model to Combat a Possible ADA Inflation
Hoskinson highlighted that infrastructures are in place to keep ADA’s inflation in check, and one is the growing activities of partner chains on the Cardano ecosystem. The founder noted that partner chains—a network model that allows chain interoperability—provide Cardano with multiple sources of revenue.
As Cardano monetizes its network proficiencies to chains building on it, the blockchain generates more income and maintains a deflationary model. Notably, unlike most other chains, Cardano does not burn tokens with every transaction but reduces supply through increased staking and treasury withdrawals.
Notably, Polkadot plays a major role in Cardano’s partner chain drive. The two highly efficient networks collaborated in November 2023, allowing Cardano to use its Substrate to develop the project.
One of Several Means of Staying atop Competition
Meanwhile, Hoskinson noted that this perfectly structured deflationary model is one way the Cardano ecosystem can stay ahead of the intense competition in the blockchain business. He mentioned innovations, such as Midgard and Leios, that would ensure Cardano leapfrogs the competition.
For instance, he stated that the L2 scaling solution Midgard would provide Cardano with data availability and roll-up strategies unprecedented in the ecosystem. Furthermore, the Ouroboros Leios makes Cardano as fast as Solana without compromising decentralization.
Notably, Hoskinson has consistently argued that Cardano technology is superior to other chains. Recently, he noted that its lead over other blockchains in the crypto space is “so significant” that they may never catch up.
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