🚀 Crypto Cardano Community Fires Back At Claim That ADA Is ‘Extremely Centralized’

[Undefeated_Lamba]

Founder and chief investment officer of crypto-focused fund Cyber Capital, Justin Bons, recently sparked controversy in the cryptosphere after asserting that Cardano’s native token, ADA, is highly centralized — eliciting strong pushback from enthusiasts.

Cardano Genesis Keys: The Main Point Of Centralization​

Justin Bons of Cyber Capital has ignited a debate on the X social media platform regarding the centralization implications of Cardano’s “genesis keys.”

According to Bons, Cardano is extremely centralized because these genesis keys allow the parent company Input Output Global (IOG) to exercise excessive control over the blockchain. He noted that these keys allow IOG to single-handedly change protocol rules without necessitating a hard fork.

He warned that IOG could possibly halt the blockchain or alter fundamental parameters such as emission schedules, or censor transactions without broad consensus — which he characterized as an unparalleled level of centralized control for a Layer 1 blockchain.

The pundit Bons notes that IOG holds five out of the seven genesis keys, a scenario he thinks sabotages Cardano’s decentralization thesis. He further criticized the decision made during the Shelley update in 2020, where the Cardano Foundation (CF) delegated their control to IOG, granting them absolute control.

1/8) Cardano has "genesis keys"; a multi-sig that controls all rules!

ADA is extremely centralized, as this is uniquely hardcoded into the protocol

IOG controls 5 out of 7 keys & can unilaterally change anything!

Ironic, as ADA claims to be the "most decentralized" chain:

— Justin Bons (@Justin_Bons) May 20, 2024

While acknowledging Cardano’s efforts towards on-chain governance with the Voltaire upgrade, Justin stated that the Genesis keys still make ADA totally centralized at the moment. In conclusion, he urged users to “verify, not trust,” stressing the importance of examining such centralized mechanisms.

Community’s Response​

The Cardano community has reacted strongly against Bons’ assertions, as many reacted and expressed their disagreements.

pic.twitter.com/nXrB1lGMFw

— ₳ Bïrd Called Px (@AbirdcalledPx) May 20, 2024

Cardano Yoda, for instance, explained in a lengthy X post that the genesis keys cannot change protocol rules capriciously; rather, they can only trigger a hard fork. He highlighted that any substantial protocol change still requires the participation and agreement of the independent stake pool operators running Cardano nodes.

The Cardano aficionado noted that the genesis keys could be used to change certain protocol parameters, including taking rewards or block size, but always with community approval.

YODA concluded by noting that Cardano’s governance will soon move to the community, rendering Genesis keys basically useless. Roles currently controlled by IOG, CF, and Emurgo will be handed to Delegate Representatives (DReps) after the incoming Chang hard fork. Only DReps, together with the Constitution Committee and SPOs, will be able to decide on governance moves.