Solana Labs co-founder and CEO, Anatoly Yakovenko has publicly derided the idea of altcoin projects holding BTC. Charles Hoskinson, the Cardano co-founder, suggested his foundation should trade 100 million ADA into Bitcoin and stable assets. This post is intended as a critique of that proposal. The ongoing discussions in the space today showcase the tension between different treasury management philosophies in the space.
Yakovenko wrote a rebuttal showing his displeasure with those projects that have taken money to buy Bitcoin for their communities. He contended that this approach is not effective and is counterproductive. Specifically, he wondered why a team should be compensated to control Bitcoin when anyone can do it himself or herself rather easily. His comments highlight a strong conviction that individual choice and the efficient use of resources will reign supreme in the world of blockchain deployments.
This is so dumb…Why would anyone want a team to buy and hold bitcoin for them when they can do it themselves? Why pay for all those coconuts - Anatoly Yakovenko
Yakovenko proposes a more conservative approach to managing the treasury. Operating revenue contingency He suggests that projects hold enough operating revenue contingency to cover 36 months’ worth of operating expenses. These funds, according to Yakovenko, should be held in low-risk assets such as U.S. Treasury bills, prioritizing financial stability and operational runway.
Hoskinson's proposal to convert a significant portion of Cardano's ADA holdings into Bitcoin and stablecoins sparked the discussion. Hoskinson believes this move can help set an enduring fiscal precedent for the entire Cardano ecosystem. He suggested that if yield could be guaranteed every year, then more ADA would be able to be purchased. This strategy would simultaneously expedite the process of restoring our treasury.
If that program is successful, then we can actually continue that strategy on an annualized basis - Charles Hoskinson
To him, obtaining a stash of Bitcoin makes for a sound financial play that would pad Cardano’s bottom line. Yakovenko contends that this approach is an extremely inefficient and wasteful use of resources. This divergence in opinion creates an interesting debate and discussion among the crypto community. The second part of the series shines the light on treasury management strategies for altcoin projects. Other analysts at Youtubers have likewise shown puzzlement at Cardano’s newly-found enthusiasm for Bitcoin.
We will not allow the maxi and the Bitcoin ecosystem to take it from us - Charles Hoskinson
While Hoskinson views Bitcoin acquisition as a strategic move to bolster Cardano's financial standing, Yakovenko sees it as an unnecessary and inefficient use of resources. This divergence in opinion highlights the ongoing debate within the crypto community regarding optimal treasury management strategies for altcoin projects. Some analysts have also expressed surprise at Cardano's sudden interest in Bitcoin.
