The Cardano community woke up to the news of a split between the Cardano Foundation, IOHK, and Emurgo on Oct. 12th. Charles Hoskinson, the CEO of IOHK confirmed the split in a YouTube live stream and gave insights into the events leading to the fallout. The split was caused by lack of diversity in the Cardano Foundation board, lack of financial transparency, lack of clear vision and a public plan, and elements of nepotism.
According to an open letter penned by Hoskinson and Ken Kodama, the Cardano movement began in 2015 and split its governance into three separate entities; IOHK, Emurgo, and the Cardano Foundation. The reason for this was to separate centers of power to mitigate the damage that may be caused by the failure of any of the entities.
Each of the three separate entities making up the Cardano community was assigned different roles. Hoskinson said Michael Parsons was appointed to serve as the chairman of the Cardano Foundation and his task was to construct a board, bring on board an executive director, and become a community ambassador.
Trouble in Paradise
It seems that Parsons did not keep up his end of the deal. Hoskinson said:
“After the foundation was formally established in Switzerland in 2016, Mr. Parsons has sat in that role for quite a bit of time and the board has diminished now to two people, chairman Parson, and a legally required Swiss citizen, and in this case, its Pascal Schmitz.”
Hoskinson said that the Cardano Foundation board, under its leadership, has no interest in investing “in its cores responsibilities and duties.” He further said that the Cardano community is federated and does not need a foundation to be successful and pointed out that Bitcoin is also federated and has been successful so far.
In the interim, IOHK and Emurgo will assume the duties that were previously delegated to the foundation and Hoskinson thinks the new set up will not cause any disruption. The project has enough funding to bring in more people to work on some tasks and keep up with the roadmap. Despite the disruption, there is still hope that the best days of Cardano lie ahead.
The split will likely affect Cardano in the short term and if they can reduce the risk if they manage the situation well. Cardano’s token, ADA is trading at $0.073 and is down by 0.09 percent in the last 24 hours.
Chairman Parsons Needs to Be Replaced
Hoskinson only hopes that Parsons will resign one day and allow the foundation to do its job. In all of this, Parsons is painted as the “bad guy” and the one responsible for the foundation’s incompetence.
Since the IOHK and Emurgo cannot fire or force Parsons to resign, the onus is left on the Cardano community to force Parsons out, who is believed by some to have a hand in crippling the Cardano Foundation. There is currently an online petition to “liberate the Cardano Foundation” from Parsons and has so far amassed more than 1,500 signatures from a target of 2,500.