Hi, this is Charles Hoskinson broadcasting live from warm, sunny Colorado. Always warm, always sunny, sometimes Colorado. This is the first in a new series of videos I'm going to make, which I call the Pentad series. These are whiteboard videos, or blackboard videos, or digital blackboard videos—however you want to call them. The idea is that we're going to talk a little bit about how we achieve growth in 2025 for the Cardano ecosystem.
First off, as we looked at the old roadmap, our goal was to reach a point of Voltater. The purpose of Voltater was to create a situation where the Cardano community is in the driver's seat regarding the direction of Cardano. The community gets to decide what the priorities are and how we think about Cardano and where we want to go. We always had this idea that a government needs a judicial, legislative, and executive function. However, the executive function was always a little murky. If you're not careful and you don't have a strong enough legislative and judicial function, there's no one to keep the executive function in check and restrain it from taking over everything.
So, you need some sort of structure in place. About a year has passed under CIP-1694 and the Cardano Constitution, and now we have a very strong legislative branch and a very strong judicial committee. We have the DREPs, which act as a check and balance. After the fork incident, we proposed creating a pentad structure. A pentad is five entities: the Cardano Foundation, Emergo, Input Output Group, the Midnight Foundation, and Intersect. We thought, why not figure out a "try before you buy" for each other and for the community?
The "try before you buy" concept is the Cardano critical infrastructure. There's a long backlog of things we need—bridges, stablecoins, oracles, analytics, and so forth. These are critical for Cardano DeFi to operate and function on par with its neighbors, Solana and Ethereum. The critical infrastructure concept suggests that all these entities together are super expensive and run by very competent business people. If we're divided, they will divide and conquer, leading to a mess and high costs. So, we should put a pentad together, have all these people talk with one voice, and collectively negotiate, like collective bargaining. We need to get ink on paper, sign deals, and ensure there are dev teams, audit teams, and other resources paired with DAPs to ensure they actually get used.
It would be absolutely insane if we spent nine or twelve months working together with all these entities and then said, "Okay, we're done. We'll just pack up shop and move home." For this to work, we have to figure out a governance structure and a culture among these five entities where we're all one team, coordinating and collaborating on behalf of the Cardano ecosystem. This is a pass-fail situation. Either we got these integrations, or we didn't; they're working or they're not.
Now, let's talk about what growth looks like for Cardano. For the purposes of this video, we have three metrics: Monthly Active Users (MAU), transactions per day, and Total Value Locked (TVL). We can argue about whether these metrics are real or not, and there's a program that Jarro Moron set up with me to discuss a better set of KPIs. One of the things I will propose as a member of the Pentad is that once we have a final set of candidate KPIs, we'll submit an info action to make them the official ecosystem KPIs.
For now, we have two main issues. First, we're missing the commercially critical infrastructure and integrations to even begin having the conversation about growth. We're basically an island, and we have to fix that. Above and beyond that, we have a list of about 10 to 15 DAPs that showcase the Cardano DeFi ecosystem. These DAPs exist, and if someone asks, "What can I do on Cardano?" you can hand them that list as examples of the best on Cardano. However, these DAPs are underfunded and understaffed. They need more people, and they lack transaction volume, users, and TVL.
These three metrics directly impact the profitability of those DAPs. By profitability, we also mean their ability to list their tokens on tier-one exchanges. Midnight acted like a bull in a china shop and opened the door for Cardano native assets and all the big players. It was challenging, but it's done. This means there's now an opening for these DAPs to reach the requisite size, scope, and scale to get listed and evolve.
With the pentad structure, the first "try before you buy" is whether we can work together effectively to collectively bargain and get all these integrations done. The next step is to grow our DeFi ecosystem where it needs to be in 2026. We need to start with a solid set of KPIs and a unified strategy, which will likely involve improving what we already have. We need to address the underfunded and understaffed issues, improve profitability, and enhance UI/UX on both the DAP and wallet sides. We also need to work with them to develop unique selling propositions (USPs) to ensure they're competitive in their domains and collaborate with capital aggregators.
We need a situation where tokens from many ecosystems can flow into these DAPs, creating a reason for them to do so, and ensuring that users become sticky within the ecosystem. Any good strategy will have an aggregator strategy, which is where things like Bitcoin DeFi fit in, as it opens up channels for capital and people. We can also do the same for the XRP ecosystem and any UTXO cryptocurrencies that lack native smart contract capabilities.
Improving UI/UX is essential, and we need to work on hybrid DAPs with Midnight to add a privacy angle, which current DeFi lacks. Part of the pentad strategy for phase two is to find an effective collaborative structure and start discussing DeFi growth. We need to identify the top 10 to 15 DAPs, fix the underfunded and understaffed issues, help them gain profitability, and get them where they need to be.
Some of this involves building up the capital base to get XRP and Bitcoin on the ledger. We also need bi-weekly hackathons. We did this with Midnight, and the growth was impressive. We can do this for Cardano, and there have already been some wonderful wins, like End Maker. Patrick organized one of the largest hackathons in Berlin, and others are doing the same. We need to showcase that Cardano can compete with the best, which will also help us rapidly improve developer experience (DevX).
In addition to bi-weekly hackathons, we need better aggregators and communication channels for people. We need to curate channels for Cardano, similar to what we're doing in Discord for Midnight. However, we also need to consider different platforms, as X is not the best medium for community aggregation due to bots, noise, and toxicity. We need tighter aggregation of people, more checkpoints with bi-weekly hackathons, and outreach on the institutional side.
We need to build communication channels for major analytics firms, institutions, and VCs to provide seminars about what's happening with Midnight and Cardano. This is like a seminar pamphlet that highlights all the interesting things in the Cardano ecosystem that people may not be aware of. The number one thing I hear repeatedly is, "I didn't know Cardano had X, Y, and Z." Many people think Cardano is a ghost chain or a dead coin because they get their information from aggregators like Messari or Electric Coin Capital. If we're left out of their reports or if the numbers don't accurately reflect what's going on, we appear to be dead.
To change the narrative, we need to communicate directly and show the real numbers, pointing out the unique selling propositions. We need to aggregate the community, establish a consistent flow of hackathons, and create a single source of truth to broadcast. There's also an event strategy where we can replicate what we did at Token 2049.
The pentad could potentially handle all of this, but we can't do it unless we figure out how to work together. This is my opinion as one member of the five, and it has to be ratified through them. If they have a different opinion, that's completely valid. Good governance means discussion and eventually consensus.
Emergo has a strong connection in Asia, especially in Singapore. Intersect is a member-based organization that brings the entire community together. I would also like to see Pragma representation. Midnight is a hyperactive commercial arm that's excellent at negotiations and deal-making, and they want volume. Hybrid DAPs make sense, as Cardano Midnight will be its base market, and we are an elite engineering firm that knows how to put these things together.
With the right governance culture, we have everything necessary to make this work. For our part, we're restructuring our internal Cardano units at Input Output and thinking about creating a Cardano business unit. This unit will aggregate our ecosystem side, engineering side, and all the governance work we do into one structure that can represent Input Output in its entirety. The leadership will be trained to think with a growth mindset.
We're also investing heavily in horizontal capabilities and technologies. This means re-evaluating many of the languages and design decisions we've made across the stack to achieve higher velocity, lower maintenance costs, and take advantage of the AI revolution. For example, Google is writing about 30% of its code using Vibe engineering, and that number will only increase. Even if AI-generated code is slightly inferior to human-generated code today, it's like comparing vacuum tubes to transistors. In the beginning, transistors were worse, but the physics moved in a direction that made them superior. Over the next five to ten years, Vibe engineering will be significant.
We have a chance to amplify our business unit and significantly increase productivity, allowing us to catch up and deploy research faster to market. We're still doing formal methods and peer reviews, but we're bringing what would typically take five to ten years into a one- to two-year cycle. We started testing in Lace as non-critical infrastructure, and now we're doing it in Acropolis. After Acropolis, we can backport it across the entire business unit.
Stage two is about taking care of what we have and thinking carefully about how we grow the engine systematically and deliberately. We have many touchpoints to grow that pie and get people excited about why Cardano is special. From the institutional side to the developer side, we need to coordinate better. There also needs to be a new ambassador program for 2026. The current ambassadors are great, but we need more and to invest in them. The same goes for the influencer layer; we need to think through what we've learned from Midnight to enhance that layer.
This is how we build up a strategy and measure its success. We will do an info action with KPIs, looking at metrics like monthly active users, transactions per day, TVL, and consumption cycles. My definition of success for these 10 to 15 DAPs is whether I would feel safe putting my own Night token or ADA into them for yield.
Cardano has an exclusive launch called RealFi, which excites me. People often ask, "When Africa?" They think we abandoned Africa, but that's false. We never left; we've given over a million loans to people in Kenya and Uganda, building out the real model that will become a DAP exclusively on Cardano. This DAP is built for a bear market, making it one of the most popular apps of all time. The yield is off-chain and unrelated to the crypto market, so even if token prices drop 90%, the yields remain the same.
If all markets decline and DeFi yields plummet, people will flock to places built for bear markets. RealFi is an example of what we're building, and we're bringing it in. We aim to be one of those 10 to 15 DAPs, aligning with the philosophical core and mission of the Cardano ecosystem—banking the unbanked and bringing exciting new opportunities. We had to get Midnight out first, and now the next in line is RealFi, with John O'Connor scaling up for that.
As a venture studio, we will continue launching experiences and partnering with others to upgrade them. Hydra is another powerful piece of technology that can achieve a million transactions per second on a DAP-by-DAP basis. The team at Delta DeFi has done a phenomenal job being the first mover in the next generation of Hydra applications on the Cardano ecosystem.
We will ask if there's a path to upgrade all 10 to 15 DAPs to be Hydra-enabled applications, allowing them to operate at Solana-level speed with minimal on-chain footprint. This would significantly reduce costs for the network while providing super-fast performance. We want to make the base network faster with Hydra and improve each DAP's speed. With bi-weekly hackathons, we can achieve tighter lead times on DevX improvements for Cardano.
Instead of large annual updates to Plutus, we can implement many smaller updates to vastly improve the developer experience. We already see some of the DevX improvements with Star Stream and others. There's a solid plan brewing here, but we've always lacked executive functions. People often ask whose job it is. I want to make it our job to accomplish these goals.
I know I can work with the Midnight Foundation, Intersect, and historically with Emergo. I believe there's a productive path with the Cardano Foundation because we're aligned on transparent external goals. We start with pass-fail tasks that are necessary for a thriving DeFi ecosystem but not sufficient. Then we can socialize a strategy that addresses both sides, including event strategies, institutional outreach, people aggregation, and DevX hackathons. We can upgrade 10 to 15 DAPs next year and get them into a strong position, ensuring they have access to Bitcoin DeFi, XRP, and other aggregators.
We will also focus on improving UI/UX and ensuring these DAPs have solid USPs. The Midnight angle adds privacy, which our competitors in Ethereum currently lack, giving us a unique edge in the DeFi ecosystem. I think that's a solid strategy, but again, I'm just one of five in the pentad.
As we build this out, we'll socialize it across the board. I made this video in the interest of transparency. We don't make decisions behind closed doors or in an ivory tower. I want to share where my mind is at. Ethereum, Solana, XRP, and Binance were all small at one point. Just because they're big now doesn't mean they're invincible. Cardano is significant, and many cryptocurrencies would trade for us. There's no reason we can't achieve exponential growth in this ecosystem.
It comes down to whether the principles, philosophy, strategy, cooperation, governance, and coordination are right. We have the right entrepreneurial spirit, and I wouldn't trade our DAP set for any other. The teams behind projects like Sunday, Phil and Midgard, Minswap, and Strike are hungry, passionate, capable, and deeply technical. They may just be missing certain elements—capital, strategy, or market access. If we unify as an ecosystem, we have more than enough resources, even at these deflated ADA prices.
We built Cardano on a $250 Bitcoin, just as Vitalik Buterin built Ethereum on a $250 Bitcoin. Solana built its ecosystem amid the aftermath of FTX and the worst recession our industry has faced. There's no reason we can't reach for the stars and achieve our goals. The delta is whether we can coordinate and work together.
This video is about the brewing executive function that has the potential to collaborate. We inked a deal today on integrations, which we'll announce later this month. It's just a preview of what's to come. I have no reason to believe we can't quickly onboard all the tier-one projects. We have to stage them in order, starting with smaller ones and then moving to larger ones, but all are necessary for our future.
We will build up the Cardano DeFi ecosystem and ensure these projects reach their potential. This has to be socialized horizontally and vertically. There's a nice debate process involved. We're a bit loose right now because it's a pass-fail situation, and everyone understands the success criteria. Either these integrations are built or they're not.
We can start measuring deeper KPIs, like 26 hackathons. If we hold bi-weekly events, we can set targets, such as wanting a million people in our Discord by a certain date. We can measure engagement, institutional seminars, and major events. We can create a master list and assess whether we integrated all the capital aggregators and proprietary tech, like Hydra.
We will also launch RealFi, a DAP built for bear markets, which is exciting. Midnight is leading the charge, opening up opportunities. Will this get us completely done? No. But now that we have an executive function, we can discuss what the next steps are on an annual basis.
As we grow, the pentad can expand. It can have seven or eleven members. As members grow larger, one or two DAPs may reach significant sizes. Midnight is here because it is the largest, most prominent, and best-capitalized project on Cardano. They add a unique perspective that none of the other members have. They understand the experience of being a Cardano asset and what the listing and development experiences look like.
Midnight represents the voice of Snack, Hoski, and all of DeFi in the Cardano ecosystem. They can't thrive if our DeFi ecosystem is broken, which is why they're involved. They are also the fastest-growing and most commercially aggressive, excelling at negotiating deals. If we speak with one voice, we can get things done. Each member of the pentad has a valid reason to be there, and the pentad can grow as the executive function develops.
The end result is still the same: we have KPIs we can ratify through info action, and then we can push forward. If you're a DREP, you need to take a philosophical decision. Are you looking for perfection, or are you looking to get things done? You've asked for unity, growth, leadership, and a compelling reason for people to choose Cardano over Ethereum and Solana. This proposal is the beginning of answering those questions.
If you vote no because you don't have 100% of everything answered, understand that you're effectively saying that unless we have perfection, we can't do anything. In that case, none of this makes sense. We should just pack up shop and go home. Great ecosystems and leaders don't have all the answers upfront. Entrepreneurship is about the right governance structure, mindset, and agility to reach your goals.
When you look at a plan like this, you're asking whether we can get it done. Who else, besides the largest entities in the ecosystem that collectively control all the software, can accomplish this? We're the only ones. DAPs can try, but the odds are they'll get taken advantage of and can't guarantee roadmap items.
Whereas collectively, because all the engineers, influence, and capital are nexus tier, we have the best shot to get that done. If we're successful there and we've built the right governance structure, we can create a much more elegant and beautiful strategy for how to put things together. That's the time to haggle and negotiate. But once it's done, it's done. Then you have clear KPIs. For the aggregators, we can set goals like wanting $250 million worth of Bitcoin on Cardano's ledger by a specific date, or the same for XRP. We can look at the DApp and DeFi ecosystem and say maybe one of our KPIs is that half of the showcase DApps are listed on at least one tier-one exchange. It's a negotiation; it's a back and forth.
We can religiously track these KPIs as a dashboard: the monthly active users, the total value locked (TVL), the transactions (TX), and then we can aggregate these metrics. We can measure how many new engaged active developers we have in our ecosystem every month, every quarter, every six months, and every year. That's how you get things done in a nutshell. It's the same when you look at Discord or another aggregation point. Why do we aggregate in a channel we own? Because then we can broadcast to everybody, and maybe we build a decentralized one using pub/sub. That's okay too, and maybe someone wants to take the lead, and we give delegated authority to them. But the point is, once it's there, there's a single source of truth, and then there's a great culture for all of this.
This is a strategy, and this is a compelling reason because you'll notice something: this strategy doesn't require the election of a king. It's delegated authority on behalf of the governance that can be revoked at any time, and it is built in consultation with the totality of the ecosystem as a whole. Unlike Steve Jobs with the Lisa recovering to the Mac, unlike Jeff Bezos at the collapse of the dot-com boom and bust trying to figure out how to restore Amazon, and unlike Bill Gates scrambling to solve a problem about operating systems, there's not a guy at the top saying, "I hope he figures it out." It's a collaborative endeavor with checks and balances, and enough actors are involved. Actually, everybody's a member at the end of the day. You can join Intersect and be a member of that organization. The majority of the board of Intersect is community-elected, which means Intersect is a community organization. It's out of its transition phase.
That's the difference between us and Ethereum, Solana, and even Bitcoin. Bitcoin is anarchy; there's no governance structure at all, so it's frozen in time. The best it can do is be a giant pool of value, and that's fine, but it's never going to be a smart contract stack. It needs someone else to do that for it, which is why Bitcoin DeFi exists. Ethereum is still heavily reliant on the brain trust of a small handful of entities, and there's no on-chain governance structure to replace them if those entities let the ecosystem down. In this structure, the pentad is elected, and it does stuff. If it doesn't do the right stuff, we know that's not going to work. We can pivot and change because ultimately, the power is vested in the DREPs. The constitution is very clear about this: you can give delegated authority to somebody, but the ultimate authority always belongs to the ADA holder in the structure.
I think that's the way we should do it. It was the bet that I made. We have the funds to do this as an ecosystem, and we can give people a good reason to believe that Cardano can grow tenfold in terms of its community size, its monthly active users (MAUs), and its TVL. It's not a technology problem. Vitalik today wants Solidity to look like Haskell. He has wanted liquid non-custodial staking for a while. If a chain split happened on Ethereum, there would be billions of dollars in losses of bonded Ether. There's zero loss for the pledge for Cardano because of the way our proof-of-stake protocol works. We can recover from massive incidents as if they never happened. This is a unique selling proposition (USP) of our ecosystem. The more people learn, the more in love with the technology they will become. Ultimately, I think people will realize that Cardano is the way to go.
But we need the commercially critical integrations. We absolutely need to take care of those who put their careers and livelihoods on the line for Cardano. We need to do a better job as an ecosystem elevating them because they're going to be the number one source of jobs. They're going to be the primary group of people at the events broadcasting and advertising our ecosystem. Ultimately, they're going to be the ones who take care of the protocol long term. If you have 15 great DApps and we take care of them, we can mandate that they have to give one or two full-time engineers to take care of core technology. If 15 turns to 50, you have 100 full-time engineers from the community to take care of the technology. They have to pay it back. Just like Snack took a loan, they have to pay it back. We can do the same in that strategy.
I think we can figure this out together. I want to figure this out with you guys. This is what it means to grow up and focus on first principles. We have to identify what makes us special, what makes us unique, and where our source of power comes from as an ecosystem to differentiate ourselves. This would never happen with Vitalik and Ethereum; it's just not how they operate. This would never happen with Solana; it's not how they operate. They have these conversations behind closed doors, in very obscure meetings, and even if they're open to the public, they're not really saying things in such a frank way. Here, I'm broadcasting straight up, and everybody can listen, see, and have an opinion. Some people are right, some are wrong, some are critical, and some aren't. You know what? The sun comes up.
People have already voted no on the pentad structure. That's their prerogative and their decision. There's no retaliation; there's no "how dare you do that." It's just their opinion, and their DREPs can decide if the principled stance is what they stand for or not. But we're just moving forward, saying, "Look, we need to get this done." The Midnight Foundation is barreling down, and they had a choice: is it midnight only or midnight in Cardano? We found a structure to make it midnight in Cardano, and now I want to find a structure to supercharge the Cardano DeFi ecosystem and make it the fastest-growing DeFi ecosystem of 2026. The technology is ready for it.
When you look at Lace, Hydra, and Starstream, we have all the USPs there. I think we can focus on a lot of these long-tail markets, and we can wake up as a leviathan by the end of 2026. We'll exit the year super strong, and this executive function is sufficient to get us there. We need to negotiate with the other Pentad partners, and I think we can get them on board. But ultimately, it's a voluntary thing. People have to agree that this is a good idea.
So, food for thought: digest it, ruminate on it. We still have plenty of time for the current Pentad proposal. I'm not slowing down, though. We're negotiating deals and getting them done. You'll see some announcements this month. I'll be in Abu Dhabi; maybe we'll have an announcement there at Finance Week. That'll be fun. More to come. I'm not going to stop until we get these integrations in because we need them as an ecosystem. It's long overdue, but that's necessary, though not sufficient. We need to do more to get the ecosystem where it needs to go. So, look for that.
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