Hey everyone, good to see you. Good to hear from you. I want to make a nice little video. So, let's say that we have a magical blockchain. Let's call it Chain X. Some project wants to build something on it, which we'll call Project Y. Project Y is well-funded and has AAA founders—like the best founders in the ecosystem you can get. They have a long track record, a good legacy, great tech, and lots of research behind it. It has a wonderful product-market fit and a huge network with lots of connections. We know that this project is also going to provide lots of upgrades to Chain X.
And here's the best part: Project Y will also pay and give a percentage of the token supply to everyone in Chain X. So, you're a member of Chain X, and you say, "Chain X also doesn't have a lot of adoption with its project system." Its TVL is low, stablecoin issuance is low, and transaction volume is low. DeFi MAU is low. When I say low, I mean not in the top 10, not in the top 20, and in some cases, not in the top 30.
You see all this, and this project comes by with all these characteristics: $200 million in funding, a founder who's been in the industry for 15 years, tech with 8 years of history, and a solid product-market fit. They say they're going to allocate 50% of the token supply, and Chain X is going to provide security for Project Y, thus block rewards will be paid. What's your first thought? If I were living in Chain X, I'd say it's a scam because no one is willing to give me a deal this good. This is as good as it gets? Most projects, the best you're going to get is maybe a little bit of TVL, a little bit of transaction volume, or a slight lift on your DeFi. It's nice to have that token around, but let's be honest, this is a different ecosystem than this ecosystem, and these guys are just using us as infrastructure. They're going to give us vesting in their project? They're going to provide a constant revenue stream so we make money?
By the way, this thing right here has eyeballs—people from around the whole cryptocurrency space. We get lots of new users coming in. If all of that is true, this is one of the best events in the history of Chain X to have projects like this want to come in. And guess what? That's what happened. This is called Cardano, and this is called Midnight. These are facts. Midnight could have launched in any ecosystem, but it chose to launch in Cardano.
There's a lot Cardano has to do to support projects like Midnight. For example, because of the way Ouroboros is designed, to send funds from Cardano to Midnight, there's a 12-hour finality. It's why it's extremely hard to build a trustless certificate bridge at the moment. We have a solution for it called Ouroboros Paris. Is it in production? No. We designed it, built it, and are currently building it. Modus Create is implementing it, and this will reduce it to minutes. That's why we created the protocol.
Transaction fees: as a Cardano native asset, right now you pay transaction fees in ADA. We need nested transactions so you can pay them in Night. It's under construction. There's a SIP for it. This research was sponsored to enable a partner chain model. There's a lot of other stuff too, notwithstanding the lack of commercially critical integrations, which put Midnight at a disadvantage.
We got the pentad to try to fix up the place so that we could get those integrations so that it's cheap and easy for Midnight to get layer zero, Circle, Tether, Oracles, and other things that it needs to survive and thrive, which other ecosystems have. We didn't complain about it; we just did the work. We said, "You know what? We want Cardano to succeed because we care about Cardano. We're going to put in the time, the effort, and the money to make this happen."
Over here, $200 million—not a single dollar from the Cardano ecosystem, my money. I made a bet that this is the ecosystem to launch on. This ecosystem had never launched a Cardano native asset on Binance, much less on many of the other exchanges. Every single exchange had to be convinced to accept CNAs, not Midnight, CNAs. It cost money, time, and effort—much more work. But it benefited the entire ecosystem and fixed things up.
I'll tell you a story about a number that eats me up every day. Here's a number: 332. It's a percentage. It changes every day. I came last year, about 9 months ago, when ADA was 83 cents, and I said we need to form a sovereign wealth fund. Take $100 million of ADA, convert it into stablecoins, USDA, USDM, so we can finally improve the numbers over here. We can make them better.
Then there was this person, a Cardano whale, who said, "Oh my god, if we even attempt to do that, it will crash the market." I knew for a fact he was wrong because every single day I talk to people who trade large sums of ADA. This $100 million of ADA could have been sold without moving the market in less than two days at the liquidity and volumes we were enjoying in 2025. Had we made that decision at 83 cents, we would hold $100 million of stablecoin, and ADA is currently at 25 cents. That means the return to the Cardano ecosystem would have been 332% in less than 12 months.
We could have sold a third of it, repurchased all the ADA, donated it back to the treasury, and we would still be sitting on a 200% plus return to be used exclusively for the benefit of the ecosystem in DeFi. There are videos of me telling you how to do this and what to do. Then we got the whale here. You know what he did? He said it's not possible. He used ChatGPT to say it's not possible to sell $100 million worth of ADA without crashing the market, which was materially untrue. Then he picks up his ball, drops off Twitter, weaponizes his stake pool and his DRep status, votes against everything IO, and when he gets called on it, he leaves the ecosystem.
For almost a year now, I've been called this evil narcissist, this terrible person who beats up the Cardano community. No, guys, this is the kind of thing—the 332%—that's killing the Cardano community. People who have been in the space for a very long time are trying to help. They're trying to tell you to do stuff like this, and then people like this say, "It's a bad idea." When they get called on it because they have no evidence, they leave and burn everything down behind them.
Then we have other community members who say they now have to investigate Midnight because there's currently a one-way bridge. There's a two-way bridge. It's not a protocol-level trustless bridge. Why? Because Cardano lacks the ZK cryptography and it lacks Paris to make that a good experience for people. So, you have to use third-party bridges until we upgrade Cardano for these types of things.
It's a BFT protocol over here. That's fast finality. It's in seconds. Ouroboros over here has probabilistic finality. It's a different design. But the only way that this must work in the mind of those people—the same people from the same line with the whale—is that it must be a conspiracy to gradually make assets move from Cardano to Midnight so Midnight can kill Cardano.
So, you have to ask yourself a very fundamental question: why would anybody in their right mind want to build on Cardano? If this is how you treat them, you can't wake up every day and say everything's a scam, everything's a conspiracy, and every person, every behavior, action, and effort they put in is to screw you. Notwithstanding people who've been here from the beginning and every step of the way, putting in time, effort, and money to try to move the ball forward.
Every proposal is nefarious. Every person is dishonest. This was the root of the Ada voucher scandal last year. What really hurt me so deeply is when do I get any semblance of benefit of the doubt? When are we perceived to be good actors in the ecosystem we created? Why do you support the people who keep doing this and call them good people while calling me the narcissist attacking the community?
We've gone from number three on CoinMarketCap to number 13. You remind me of this every single day. You post pictures and say, "Charles, do something." So, I come in and say, "Let's do the sovereign wealth fund." We can't possibly do that. We lost 332% returns because we said no to that. It got mired up in bureaucracy. I pay anybody, have to have a governing board who knows this thing and that thing. Just do it.
Say, "Let's do the index." No, let's give a bunch of money to Draper. The index gives you instant liquidity. The index injects money today into the tokens of everybody in the ecosystem, the top 20, top 30 projects. It comes with a lot of strings that can influence behavior. A venture capital fund has a 9-year lockup. It'll be 6 years plus an optional three on top of that, with no guarantee that anybody in the ecosystem will get anything. It could be completely external projects with not enough equity to force them to stay in Cardano.
Did anybody from that side come talk to us? We ran the C fund. For better or for worse, we were the only major VC deploying capital—$25 million in the Cardano ecosystem. I have a little bit of perspective. No, we just got to give them money. Then you got Midnight. It didn't have to give 50% of the glacier drop to Cardano. In fact, when we announced the glacier drop, the perception was Cardano was going to get screwed and get nothing or very little because it was going to be proportional to Bitcoin and Ethereum, which have larger market caps.
Everybody was stunned that such a large amount of token would be airdropped to Cardano. But apparently, this is a secret conspiracy to kill the Cardano ecosystem by launching the token on Cardano, giving staking rewards to ADA holders, and when users come to use Midnight, they redeem it on Cardano. So, the Solana people have to create Cardano wallets. The Ethereum people have to create Cardano wallets. The Bitcoin people have to create Cardano wallets. That must mean we're here to kill Cardano.
Get your heads out of your asses. Do you want this to succeed or not? You can't treat people this way. You can't treat projects this way. No one in their right mind will come to an ecosystem that doesn't pay you anything, that's not going to give you users, that's not going to give you competitive infrastructure, and then build all this stuff to make it more competitive and then be told that they're the enemy and need to be investigated.
You can't treat people this way. You have to stop. You're deranged. You can't gaslight and say the people doing this are evil and anti-community and narcissistic. Every day, this governance is creating a toxic hellscape, driving good people out, destroying good projects, and creating this roving gang of negativity. Input Output is not the enemy. The Midnight Foundation is not the enemy. The Midnight Project is not anti-Cardano. It was built as an extension to Cardano and a realization of the vision I wrote about in the paper, "Why Cardano," in 2016 for the Cardano CL model.
The whole concept of a partner chain, I came up with that 10 years ago—before ADA was live—which meant every single person who bought ADA on the secondary market from the exchanges bought into that understanding that this was the plan to build partner chains. A much more sustainable model than the L2 model that Ethereum embraced or any of these other people. We told you what we were going to do, and we did it. All of you financially benefited. The stake pool operators benefited. They get more income streams, and if Midnight is successful, more partner chains come. You go from one token income stream to two token income streams to multiple token income streams.
But this is an attack on Cardano? This harms Cardano? This destroys our ecosystem? Midnight is the first time in a long time that venture capitalists have looked at Cardano with a second set of eyes. They already wrote us off if you read the reports from Electric Coin Capital, A16Z, and others—dead ecosystem, ghost chain. You hear it every single day. It pisses you off, and it pisses me off. Then Midnight comes around, and they say, "Wow, I had no idea Cardano could launch a project like Midnight." It brought new people in. It created a second look.
It said there must be something special in Cardano for such a project to exist here. But that apparently doesn't benefit the ecosystem. That apparently doesn't drive adoption. That apparently doesn't bring people in. You have to stop, guys. You have to stop. Every single person in the Cardano ecosystem listening, reset. Midnight is not the enemy. The Cardano sovereign wealth fund was not a cash grab. The index idea is not a bad idea. Not everybody is here to screw you or out to get you. Some people who built the technology would rather see it be successful so they don't look back at a decade of effort and sacrifice in their life and say we failed. They want to see this technology succeed, grow, thrive, and get to the next level.
So, don't treat them that way. Don't treat these types of projects this way. You get a mulligan with me because I'm the founder. But ask yourself honestly, would anyone who wasn't accept this type of behavior when considering an ecosystem to build on? Would they? Would you? Be objective about it. Honestly speaking, be objective about it. And the people that propagate this trash, don't delegate to them. Don't give them a voice. Delegate to the people who do the opposite. Support projects that do the opposite.
Another thing about Midnight is it provided a necessary lifeblood to a lot of dying firms and DeFi applications in the Cardano ecosystem. By developing technology for Midnight, they can make payroll because the foundation wasn't paying them. Their projects were not revenue-positive. So, what options do they have other than to shut up shop or go somewhere else? There are dozens of people and entities in this situation, independent of Input Output, who got a second wind building in the Midnight ecosystem. Did they leave Cardano? No. It allowed them to stay in Cardano. But I guess that's the kill Cardano too. We should investigate that.
It's so insanely insulting. I know where it goes. I told you last year when I did the sovereign wealth fund video, 9 months ago. You can see it on my YouTube. I told you we got to do this to restart things. We didn't do it. It got killed in the governance bureaucracy. Then everybody attacks me for bullying the whale to leave. No, he did a great job bullying other people. When people call him on things he's obviously wrong about that are damaging to the ecosystem if we don't do them, he leaves and then automatically votes against everything my company does, whether it's a good idea or a bad idea.
That's not rational adult behavior, and you don't praise people like this. You don't attack people who hold others accountable for that behavior. You don't attack people who hold others accountable when they say they're going to investigate Midnight because Midnight's launching with a one-way bridge, which is not even true. We're building with one chamber and others for a bilateral bridge. But it doesn't need to be bilateral right now.
What reason would you have to move your Night over? So, let me get this straight: we're going to destroy Cardano by taking a Cardano native asset and instead of having it live on Cardano, move it over to Midnight, where you could do nothing with that asset? There's no liquidity with that asset. There's no exchanges listed there. What damages Cardano is when a Cardano asset leaves Cardano and gets listed on a different exchange. The liquidity leaves Cardano to that other place, and there's no reason for them to go back.
You have to go back to be able to send your token to Binance, Coinbase, or Kraken. So, you lose liquidity going over if you go over right now. Does this make any sense to you? But no, we should investigate Midnight. Anyone who says, "Stop doing it," is a bad actor. I'm at a loss, guys. I'm at a loss here. It's been a long, long, brutal 10 years. I get that the markets are down, and I get that everybody is upset right now. It's hard. There are a lot of people underwater, and nothing seems to be working. We get a little momentum, and then something happens.
We get a little bit of momentum, and then Trump decides he wants to go bomb Iran, and the Strait of Hormuz shuts down. We get a little bit of momentum, and then another thing happens. I get it. I really do. But you don't get out of these situations by turning on each other and creating a circular firing squad. You don't get out of these situations by taking your promising projects like Midnight and setting them on fire and attacking them. You just don't. All you do is take what value you have and momentum you've gained and destroy it.
To what end? Where do we go from there? Let's say you win, Mr. Investigate Midnight. Let's say you win, and Midnight leaves. It's gone. What's left behind for everybody else? What do we gain? Where do we go from there? What do we get for the ecosystem? Will another Midnight-scale project say, "Boy, I can't wait to go build on Cardano"? Let's be honest. Will the partner chain model be validated? Will the Cardano holders get another airdrop for another token in the future? Will any of these things happen? No.
And where will the project sit? I'm told just ignore these people. You can't when it's decentralized governance, and they have people staked to them, delegated to them. They have a vote. They have a say. You know what? You have to speak up. You have to hold people accountable for absurd opinions. Otherwise, that's how you get a Trump. That's how you create these political realities that are just so terrible. You have people double down and double down and double down and triple down and triple down, and you end up in this horrific situation where you live in a fantasy world.
We saw this with the Ada vouchers last year. You saw how horrifically destructive and counterproductive it was. At the end of the scandal, what was it? Complete exoneration. They couldn't accept it, so the auditor must be evil and wrong
No, they went to Kenya. We gave $4 million in loans over a four-year period to learn how to build a yield-bearing stablecoin microfinance system built on Cardano, launching this year. That's going to be one of the biggest gains for the Total Value Locked (TVL) of our ecosystem. But what do we see? You lied about Africa. You lied about all these other things. We didn't lie; that team stayed in place and kept working. We never lost sight of banking the unbanked. But there's no benefit of the doubt, no discussion, is there? It's just attack after attack.
This system is going to be the single biggest user of USDCX and Layer Zero because it needs to be to bring in capital. If it's successful, it'll radically change the Monthly Active Users (MAU), transaction volume, and TVL characteristics of Cardano, along with Midnight. Those are just two projects. Not too far behind is Blockfrost. Fifty percent of all our transaction volume gets routed through their servers. You know what? It's centralized. So why did we buy it? Because we want to decentralize it and have Cardano lead the way for off-chain infrastructure. We don't want to run into the Alchemy trap or the OpenSea trap.
Moxie Marlinspike wrote a wonderful article about how hollow and filled with lies Web3 is. All the good stuff in Web3 is enabled by centralized solutions off-chain. He demonstrated one case study after another where that was true, and it bothered me. So, I said, "Let's decentralize that too." Cardano can lead the way. What's the model for launching something like that? It's a partner chain, just like Midnight. So, is Blockfrost going to be treated the same way? Is Blockfrost the enemy? Is Blockfrost a parasite stealing business from Cardano? If not, why do they get a pass while Midnight doesn't? It's the exact same model. Honestly speaking, guys, come on.
There's a plan here. Just follow it. Get Leios out. Keep building Hydra. Double down on the Developer Experience (DevEx) and make it better. Get the node diversity done. Embrace the partner chains. Get them running, get them launching, and get an airdrop done every year. Get them listed, get them big, and get their business models where they need to be. Put your ADA into Cardano DeFi. If you say there's too much slippage, vote for the sovereign wealth fund proposals so that we actually have the liquidity in because I guess the core entities won't do it. I put as much as I could in. Where do you think that stablecoin minting came from? It sure as hell wouldn't be a CF.
You get what you vote for, and you get your attitude. Sometimes there has to be a speech and some tough love. We are decentralized now. I can't save you. I can't come in on a white horse and make it all better. I can give you advice, I can build things, and I can tell you what I think we need to do, but you have to do it. You have to vote for it. Who you choose to delegate to, who you give a voice to, and who you don't give a voice to will ultimately decide whether we win or lose.
I don't have all the solutions, and I've made a lot of mistakes. But we're learning. What you see in Midnight is a reflection of everything I learned from what we did wrong with Cardano, which is why it has a better chance to grow. Its growth is connected to Cardano's growth. They take each other and help each other. That's my commitment there. But you also have to admit that what's going on is not productive and not healthy. We have to change this as an ecosystem because we can't lose. It's not just that Cardano fails. We're one of the last legacy projects that hold on to Satoshi's vision. We actually believe in decentralization. We don't just say it; we believe it.
We're one of the last projects that actually believes it's a good idea to have self-custody of your assets. By the way, that's why the glacier drop was the way it was. It incentivized you to hold on to your ADA yourself and not have a third party hold it. We actually believe in these things. We don't just say it; we do it, and it's connected to every product decision. If we lose, it's a referendum that that thinking is wrong.
And you know what the replacement thinking is? Custodial wallets, social credit, reversible transactions, frozen accounts, KYC, and AML with every transaction. Is that what Satoshi Nakamoto signed up for? Is that what we advertise for cryptocurrency? Was that the purpose and point of all the labors of this industry for the last 16 years? Was that what we were supposed to be? Well, it was just more competitive the old way, so we went back to the old way. Sorry, everybody. Oh well. What can you do? It was a good run. The guys at the top made some money; they got their exit liquidity.
If you complain about it, then they'll shut your money off, so you should just smile and nod. Yeah, smile and nod, because we can just trust these people, right? No new wars. Hey, Iran. We can just trust these people. We're going to release the Epstein files. Actually, just sorry, and we're not going to. You can't trust them. They lie and lie and lie, and they'll never stop lying because they make money and gain power by doing that.
This technology is the only thing we have as humans to create constraints on the rich and powerful—constraints that even nation-states can't evade. It's the only thing we have. If Cardano fails, it's a referendum that the philosophy of Cardano was wrong. Peer review is wrong, formal methods are wrong, decentralization is wrong, self-sovereign identity is wrong, and self-custody is wrong. That translates to Wall Street winning. I don't want that to happen. It's why I'm still here. It's why I still take the abuse. It's why I still show up every single day. It's why I have these tough love conversations. They don't benefit me.
They'll be chopped up into 20-second clips, 30-second clips, and repackaged for anyone's agenda. I'm anti-XRP, I'm anti-Coinbase, I'm pro-Brad, anti-Brad. It depends on how you chop up my long-form content. This does not benefit me to say these types of things. It'll be weaponized and used by those who don't like me. But I'm not speaking to those people. I'm speaking to the people in the Cardano ecosystem who will take the time to listen to the whole video. I take a hit and I take damage saying it, but I don't care anymore because the stakes are too high.
We have this year and maybe some of next year to prove the markets wrong and win. That's it. It's go time. I want to win. Too many people have sacrificed too much time and effort not to. Projects like Cardano, not exclusive to Midnight, are necessary but not sufficient to win. There's a lot of other stuff we have to do. But if Midnight fails because it's necessary, I do not believe Cardano will succeed. Full stop.
That's why I'm here fighting every day in the trenches, and I make videos like this to remind you of that as a community and to understand how existential these things can be. This is not just another token. This is not just another little thing, and oh well, it's the next big thing. It's the next big part of the evolution. It's the final part of the roadmap as we turn on Basho. It's turning on the Cardano CL component, the partner chains. You're free to disagree, but then you have to prove to everyone else in this ecosystem what the strategy is.
To all those who are on the fence, listening to person A or person B's opinion, what you must demand from person B is the strategy and the commitment. They can't just say it; they have to do it, and they have to show how it's going to work. It's that simple. So, I'll be here tomorrow, and the next day, and the next day. I'll keep taking hits one after another, and we'll see where this goes. I believe our best days are ahead of us, and I believe we need moments like this to remember why we're here and what we fight for.
I believe we have moments like this to reset. I don't have any ill will against anyone in this ecosystem, but I do hold them accountable for the things they say and the desires they have. If they accuse people of fraud who didn't commit it, that's wrong. If they say projects are here to extract value and destroy the ecosystem that are here to help the ecosystem, that's wrong. When they say that we shouldn't invest in our DeFi ecosystem, either through an index or a sovereign wealth fund, that's wrong.
If they hold those opinions and publicly express them, I have every right to hold them accountable and say they are damaging the ecosystem. It is not embracing diversity and good governance by saying, "Well, let's just let that fester." You all saw it—332% returns if you had done what I said with the sovereign wealth fund. We'd have a much stronger DeFi ecosystem right now. That is the consequence of this behavior in that one little microcosm, which will grow like a cancer to the next one, to the next one, and eventually kill the organism. It'll kill Cardano. That's what they're doing, and that's what they're pushing for.
That's why I'm here, and I take the hits. I make the video; I don't get the brand advantage, but you get the lesson. Anyway, it is what it is. Short 51 minutes. Until next time.
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