Cardano Founder Calls for Collaboration to Compete with Tech Giants in Web3

Cardano founder Charles Hoskinson has emphasized the need for a more collaborative approach in the next generation of cryptocurrency projects to effectively compete with major centralized tech companies entering the Web3 space. Speaking at a recent event, Hoskinson highlighted that one of the primary criticisms of the crypto and decentralized finance (DeFi) space is its “circular economy,” where the rise of one cryptocurrency often comes at the expense of another, limiting overall industry growth.

Hoskinson argued that to stand a chance against the centralized technology giants joining the Web3 industry, cryptocurrency projects need to adopt more collaborative tokenomics and market structures. He pointed out that the current environment often sees one crypto project’s growth at the expense of another, rather than contributing to the sector’s overall health. This, he said, is not sustainable in the face of trillion-dollar firms like Apple, Google, and Microsoft, which may soon join the Web3 race amid clearer US regulations.

“You can’t build a global ecosystem this way, and you can’t win this way,” Hoskinson stated. “Because here’s the thing. The incumbents are much larger.” He emphasized that the current tokenomics and market structure in the cryptocurrency space are intrinsically adversarial, creating a zero-sum game. Instead, he suggested finding tokenomics and market structures that allow for a cooperative equilibrium.

Hoskinson’s comments come as the industry awaits progress on US stablecoin legislation, which may come in the next two months. A secondary bill, the GENIUS Act, would establish collateralization guidelines for stablecoin issuers while requiring full compliance with Anti-Money Laundering laws. More participation from tech giants is likely after the stablecoin bill is passed, with the market structure bill potentially passing by September.

Hoskinson noted that once regulatory barriers are removed, tech giants like Facebook, Microsoft, Amazon, Google, and Apple could enter the cryptocurrency space, leveraging their massive user bases. He warned that crypto projects need to build infrastructure that these incoming tech giants can leverage to compete effectively. “So if those barriers are removed, how do we, as an industry, compete against the wallet that Apple built in bundles with the iPhone,” he said.

To align blockchain network incentives, Cardano has been working on “Minotaur,” a multi-resource consensus protocol that combines multiple consensus mechanisms and networks to pay a unified block reward to multiple networks simultaneously. “You pay in the currency you want, and multiple networks are involved in securing the system and have a financial incentive to keep the system around,” Hoskinson explained.

In summary, Hoskinson’s call for collaborative tokenomics and market structures in the next generation of cryptocurrency projects underscores the need for the industry to adapt and innovate in the face of increasing competition from centralized tech giants. By fostering a more cooperative environment, the crypto space can better position itself to compete with the likes of Apple, Google, and Microsoft, which are poised to enter the Web3 race with significant regulatory tailwinds.