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Hi, this is Charles Hoskinson broadcasting live from warm, sunny Colorado. Always warm, always sunny, sometimes Colorado. It's quite windy today; XL had to turn off power lines just so they didn't get blown down and burn everything to the ground. Today is April 7th, 2024, and I'm making a video to talk about Hydra, our good friends at Hydra, in particular about a lot of FUD that's been spreading around. I'm not sure of the origins of it. In fact, I've noticed lately that there's been a humongous amount of lies and disinformation—absolutely bizarre misleading information that's floating around.
If you actually take a look, here's a tweet—a well-intended one. It says, "What's all this FUD I hear about Hydra potentially being scrapped behind the scenes? I'm having difficulty finding recent talks about it, but it seems like a stretch. What's the real picture?" The source of truth has always been the same: Hydra's official website. If you take a look at the GitHub repo, things are moving very quickly. There were commits just a few days ago, and tons of development work is happening. There are 39 contributors, and the project continues to grow. There have been 19 tagged releases; the last release was actually just four days ago. You can take a look at all the different things going on, all the breaking changes, new contributors—it's pretty exciting when you take a look at it.
We’ve gotten through all of the initial features, and now we're starting to work on the really interesting features like incremental decommit and commit, optimistic head closures, modular API, automated handling rollbacks, relay-capable mesh networks, and there’s a full roadmap here. This was what was there, and this is what they’re working on now. They’re slowly chipping away at it. In general, when you take a look, there are 209 research papers that have now been published through all the different labs working on Cardano. For some reason, none of this means anything to anybody in the Twitterverse because what people are saying is just straight-up lies. They say it's quietly scrapped behind the scenes. There's never been more progress, more ambition, and more excitement behind an example project that we have in Cardano. It's completely open, fully transparent, and truly community-driven. There are engineers, but there are also community engineers, and there’s a lot of community participation. There are many discussions about next-generation Hydra protocols, and we’ve learned an enormous amount about how to run Hydra in Cardano and the kinds of things we need to do to get Hydra where it needs to go as an ecosystem.
You start with formal research papers, then you go and start doing translational research, create good places for people to aggregate, and then you actually start implementing it in the general public. This is how all really good open-source research-driven projects work. You’ll notice that some of the contributors are members of the community who have projects in the community, whether it be Sunday Swap or otherwise. They take that and integrate it into their software that’s being built on Cardano. Then this guy here says, "I’m hearing behind the scenes it’s been scrapped. What’s going on?" It’s because, for some reason right now, there’s a lot of lies being spread. For example, that change is delayed or governance is not coming to Cardano.
Well, here’s the formal specification for everything that comes with the governance hard fork, written in Agda. There is no higher standard in computer science. You can see many different institutions contributed with a whole bunch of our researchers, and it’s actually a peer-reviewed paper that’s going to be appearing at a workshop here in just a moment. It’s right here to appear at FMBC. This actually talks about how to specify the Cardano blockchain in Agda. Once it’s specified here, you can extract code and then prove properties of it. This is the highest standard you could achieve in software engineering and protocol design: to actually write things in a formal language like Agda. You can prove tons of properties of it, and we felt it was very important to do this because this is voting.
The entire design is formalized to the extent that it can be in a peer-reviewed paper. We have outlined the mechanized specification of the extended UTXO-based ledger rules of the Cardano blockchain by taking a bird's-eye view of the hierarchy of transitions, handling different subcomponents in a modular way. Although space limitations preclude us from exhaustively fleshing out all the gory details, those details are actually in our GitHub repo over at Intersect. We hope to have conveyed the general design principles that will be helpful to others when attempting to mechanize something of this kind and at this scale. By the way, this is the first time in human history that a cryptocurrency has been formalized at this scale. It’s an exceedingly complicated thing to do.
We did it in the little space we could afford. For more thorough details, we made a conscious choice to put emphasis on the most novel aspects of the current era of the Cardano blockchain: decentralized governance. The introduction of these notions of voting, eradication, and enactment complicate the ledger rules of previous eras in a fairly orthogonal way, meaning that it introduced a lot of risk and complexity to Cardano. We designed the entire paper; a mechanized formal artifact of this kind is rigid enough to eliminate any ambiguity that would often arise in a penned paper specification. Absolutely true, there could be tons of bugs or issues that are pushed into Cardano, but we basically wrote a paper to demonstrate that that’s not the case, and the paper matches a machine-understandable specification, meaning that this actually runs in code because it’s written in Agda.
The broader point is that this is how we do things in Cardano. It’s not new; you guys know about it. You see it, and it’s not hidden. It lives in a public artifact, whether it be through the conferences, the papers, the GitHub repositories, or the code running on your computer. Cardano is one of the largest formal methods-bearing open-source projects in the world. It’s a marvel of computer science, and a lot of amazing things have been learned and derived. But then you go to Twitter, you go to Reddit, you go to YouTube, you go to all these carnival-barking podcasters, and what they say is that it’s a dead project. No one’s using it, it can’t scale, nothing has been delivered, all the projects are secretly canceled, and nothing is being done. It’s like living in two parallel realities. It’s like you’re building this beautiful city, making all this progress, and then you have somebody saying the city doesn’t exist. Not that it’s not going to be a good city to live in, or maybe it’s not their city, or maybe the city’s too far from the coast or whatever have you. No, they say they physically say the city does not exist. It’s all a lie.
I’m not exactly sure of the origins of this. It’s gone beyond good faith misunderstandings, marketing failures, or Dunning-Kruger effects. I think there is malicious intent behind some of the rumors that are being spread because they’re pervasive, consistent, and they ignore any attempt to dissuade. If there’s a good faith effort, if you come to me and say, “I don’t think this project exists,” or “I’m hearing troubling rumors about it,” we would resolve that by just showing you the evidence. For example, I just showed you the GitHub repository and showed you that it’s actively being committed to. There are external contributions, there’s a roadmap, and the roadmap is being executed. Progress is being made every step; it adds new capabilities to the system, and there’s a deep R&D pipeline that continues to add these capabilities.
Most normal people would say, “Oh, okay, well when do I get something that’s useful for this type of application? Poker, Blackjack, decentralized exchange, whatever have you.” Then we can have a conversation about what capabilities would be required, when in the roadmap such a thing would be possible, and the types of benefits you get from it. You show all this evidence to the people purveying this misinformation, and they say none of that exists. It’s all a lie; it’s all a misunderstanding. When you get to that point, it’s almost like politics, and it feels a little disingenuous. It feels like people are actually going out of their way to lie.
The other thing is people are starting to lie with numbers. For example, we see, “Oh, Solana has 11,000 times more transactions.” Well, they never mention that 90% plus of all the transactions in the system are related to consensus overhead or other such things that have nothing to do with economic activity. Yes, there is a higher TVL, but there was also an enormous pre-mine, and that’s just all sitting in accounts. It’s not being utilized and deployed into the system. People actually believe that. It’s the same for a lot of these VC-backed coins. They gave themselves big allotments of cryptocurrency, and they take it and put it into their TVL and generate yield from that. Then they have their own market makers and their own people doing things to create economic activity, make profits, and then they reinvest those profits into astroturfing adoption.
Sure, we could take half the market cap of Cardano and take $10 billion and mint it or something and put it into TVL, and then we’d have one of the highest TVLs in the entire ecosystem. There you go. It’s not really a reflection of organic growth, now is it? Meanwhile, Cardano’s had enormous organic growth, and not only is it ignored, in many cases, they leave it off of the indices. That’s where it gets really confusing to me. You actually have positive numbers; you go to the indexes that track these things, and you say, “Why is Cardano not listed?” Well, we don’t list Cardano. But why? You just saw Gemini today; they say, “Tell us your favorite cryptocurrency.” Not you, ADA people. Okay, so why ask the question? Then why are we excluded from even participating? Polls come out, and they leave all the Cardano projects off. You’re not even allowed to vote on them. It’s not whether we win or lose, or it’s a good poll or a bad poll, a fair election or not a fair election. You’re not even allowed to vote in many cases for these things or left off the list.
So there’s something there, and maybe it’s fear because what I just showed you is not a trivial thing. It is one of the most difficult, high-entropy, and incredibly expensive and time-consuming things a person can do in any software project. It cannot be replicated by three Silicon Valley college dropouts or high school dropouts sitting in their mom’s basement hacking something together with Ruby and TypeScript. It requires people who have dedicated their lives to becoming craftsmen of software and formalization, and it requires enormous amounts of domain expertise. It’s like the neurosurgery level of stuff. It’s post-PhD. Even with a PhD in computer science, most people don’t do this because it’s so specialized and so unique. However, what it does produce is clarity and certainty and a beautiful roadmap that speeds up over time because you’ve proven all the guardrails and the boundaries of things.
The Cardano governance upgrade is the largest in the history of the cryptocurrency space for any cryptocurrency to do this. It’s pretty crazy, and the fact that so many different pieces from so many different actors had to come together—from dozens of workshops being held around the world to over two years of discussions and a SIP to a formal specification in Agda worthy of a peer-review process because it was so intricate—to the Soncho net, all the testing there, to the Gov tool that sits on top. That’s just one of a half dozen innovations that are currently being developed in parallel with Cardano, Hydra, and the Mithril and partner chains framework, including partner chains like Midnight. You’ve got enormous amounts of work happening with Orbis, Leos, and Paris. These types of things. So you have all these different work streams that are occurring simultaneously in addition to this gargantuan program of decentralized governance. The ecosystem is sustainably doing this with principles at scale every day and pushing it through. None of that is reflected in any of the comments of the crypto media, the indexes that leave us off, the carnival-barking YouTubers, or the Twitterati because it’s not about that. It’s not about progress; it’s not about utility; it’s not about actually building something that’s going to be here for 10 years, 20 years, 50 years, or 100 years. It is about short-term value appreciation so that people can dump on retail and run away.
Otherwise, why wouldn’t they care about the things we care about? Why wouldn’t they care about decentralization? Why wouldn’t they care about semantical correctness? Why wouldn’t they care about building a decentralized brain through the Piew process so that you always have innovation coming down the pipe? Why wouldn’t they care about effective governance of the project that’s inclusive and brings people together and gives everybody a say? Why wouldn’t they care about things like transaction determinism, the ability to validate things locally that are true globally, or how the system is going to interact with all the other blockchain systems and legacy systems? Why wouldn’t they care about self-sovereign identity, integrating these things together and using them for regulated value transfer and selective disclosure and other such things which are required for the legacy world and real-world assets? Why would they care about these things? They say they care, but then when people actually go and do them and make meaningful and significant progress on them, seldom does that even get mentioned. Instead, it’s number go up because that’s the game they play.
They say there’s a bull market; everybody’s getting a little nervous and shaky because they know that these things come every three to four years as a direct consequence of the halving. They see the path to $150,000 or $200,000 Bitcoin. They see the path to it. They say, “Okay,” and they do some number crunching, and there are rising tides with everybody else. They say, “I’ve got to get launched by that time period. I’ve got to get out there by that time period so I can get the big surge and get an EO-style dump and make a boatload of money.” That’s what they want. I guess if that’s the game you’re playing, every action does make sense. But you can’t let other actors into that conversation because it short-circuits your master plan. You can’t let an ecosystem like ours play that game because then your users start asking for things you can’t provide. They start asking for decentralization; they start asking for the receipts on how you know your protocols work. They start asking for formal methods to be applied; they start asking for decentralized governance and having a seat at the table. They start asking about your 50% pre-mine or 60% pre-mine or other such things. They start asking about this type of stuff, and you have no real discussion about how that’s going to be used, where it’s going to be used, these types of things.
So you can’t let a Cardano in that doesn’t have the VCs and has this incredible decentralized growth, and its mere existence is a counterexample to everything they tell you about what you’re supposed to do to be successful in the space. Then they just straight-up lie: Hydra has been canceled, Midnight is replacing Cardano, and Input Output is leaving the ecosystem. There are no transactions per second—just lie after lie after lie after lie after lie after lie down the block. Then they propagate these lies and put them into their echo chambers. Nobody listens because no one actually hears the source material; they just get the material of the material of the material of the material, and the original argument is completely lost in it. But you know it doesn’t impact the roadmap; it doesn’t impact the direction of Cardano; it doesn’t impact the work that we do; it doesn’t impact the vision behind it; it doesn’t impact the fact that we’ve achieved so much already. We went from nothing to a huge ecosystem in a period of just seven years with the engine knowing itself. It’s not going to deviate or change, and the funding is there thanks to the system itself to continue this indefinitely, year after year. It’ll get stronger, faster, better, more capable, and never once compromise its principles or integrity. That’s something worthwhile, and I think a lot of people see that, and a lot of people are terrified of that because they can’t compete with it.
It’s just dismaying, although it is quite toxic at times, and it gets deeply frustrating. A lot of people prescribe how I should act and think and how I should feel and what I should do as a leader. It’s hard at times to partner with certain people who, you know, behind the scenes are doing dirty tricks to hurt your work and your projects, actively trying to prevent liquidity, actively trying to prevent growth, poisoning the well for projects in Cardano that are seeking venture capital. It’s not my ego that makes me so angry when people criticize; it’s quite mellow these days, guys. It’s when those people go out of their way to hurt Cardano projects. It could be as simple as an investor in a Cardano project saying, “You should leave the Cardano blockchain and come to our blockchain, or else we’ll punish you,” which has happened for certain Cardano projects. I won’t name names, but you know who you are, and you know what you’ve done. You see these things, and it’s hard not to get angry because every person here signed up for the dream. They want something with principles and integrity; they want to have a say in how their infrastructure runs, and the infrastructure is running. It’s not getting in the way for the most part of them being able to build and make progress. What you’re doing is you’re taking a community that loves peace, and you’re telling them that unless they leave, they’re going to be punished and hurt. That’s what gets me angry, and I see a lot of it these days.
I also see us not getting a fair shake out of certain major industry players with things like, for example, stablecoins. We just have to solve it ourselves as an ecosystem, and we will because we solve every problem as an ecosystem. There’s an inevitability behind it. As people bark and complain and cry about all these problems, they don’t for a moment realize that over any time horizon, give us enough time, Cardano will fix it and we’ll figure it out. When Shelley, when Goguen, when Coinbase, when this, when this, when this—it always eventually comes. The community figures it out; the ecosystem figures it out. It takes a little bit of time. If you tell me that
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