Charles Hoskinson Claims Ethereum is a “Dictatorship”

A long-dormant Ethereum whale deposited 3,510 ETH—worth over $9 million—into Kraken, while another wallet tied to Genesis Trading moved 5,000 ETH to FalconX, raising concerns about potential selling pressure. Meanwhile, Hoskinson has criticized Ethereum’s governance model, comparing it to a “dictatorship” and highlighting how Cardano’s new governance approach aims to avoid such pitfalls while promoting decentralization.

Cardano’s Voltaire-Era Governance Overhaul Aims to Prevent Dictatorship and Anarchy, Says Charles Hoskinson

Cardano’s journey towards establishing a robust governance framework has taken a major leap forward with its Voltaire-era overhaul, which founder Charles Hoskinson claims will prevent the blockchain from becoming a “dictatorship” like Ethereum or falling into the “anarchy” of Bitcoin. Speaking at the Token2049 event in Singapore, Hoskinson emphasized how Cardano’s new governance model will balance decentralization with effective decision-making, setting it apart from its blockchain competitors.

Hoskinson, an outspoken figure in the blockchain space, didn’t mince words when discussing Ethereum’s governance model, which he sees as overly reliant on its co-founder, Vitalik Buterin. “Everybody looks to him for the roadmap. Everybody looks to him for inspiration, and he’s also the only person who has enough power to rally people,” Hoskinson said in an interview.

According to Hoskinson, Ethereum’s heavy dependence on Buterin not only stifles decentralization but also runs the risk of creating a single point of failure. “If you were to remove him from the equation right now, what’s the next hard fork going to look like, and how quickly can they actually get there?” he asked, raising concerns about Ethereum’s ability to sustain itself without its visionary leader.

This centralization of influence, Hoskinson argues, moves Ethereum closer to a “dictatorship” rather than the decentralized governance system it was designed to be. The Ethereum co-founder points out that Buterin’s vision has been central to key decisions, such as pivoting the network away from sharding and towards layer-2 rollups for scalability. Hoskinson claims that this shift, which has been met with both praise and criticism, was largely influenced by Buterin’s writings and advocacy, not through community-driven governance.

While Hoskinson’s remarks about Ethereum were sharp, he didn’t spare Bitcoin from criticism either. He compared Bitcoin’s governance structure to “anarchy,” claiming that its “forever simple” protocol makes it inflexible to innovation. Bitcoin’s governance, he suggests, suffers from a lack of leadership and a decentralized structure that often leaves the network stagnant.

According to Hoskinson, Bitcoin’s failure to effectively evolve demonstrates the dangers of a system with no clear decision-making mechanisms. He argues that while decentralization is critical, a lack of leadership or guidance can prevent meaningful progress.

In contrast, Cardano’s Voltaire-era governance overhaul aims to navigate what Hoskinson calls the “governance trilemma” — balancing efficiency, effectiveness, and integrity. The blockchain’s new governance model introduces a members-based organization called Intersect and a system of delegated representatives to manage complex governance topics and guide the platform forward.

At the core of this new system is Cardano’s Chang hard fork, which occurred in early September. This upgrade has transformed ADA into a governance token, allowing ADA holders to elect representatives, vote on development proposals, and participate in decision-making on funding for community projects.

This decentralization of power ensures that Cardano is not reliant on its founder for survival. “Charles, alive/dead doesn’t matter. There’s still going to be innovation on a daily basis,” Hoskinson asserted. Unlike Ethereum, where Hoskinson claims that Buterin’s presence is essential for guiding the network, Cardano is working toward a more autonomous model that can thrive independently of its creator.

The Role of Intersect and Delegated Representatives

One of the key elements of Cardano’s governance overhaul is the establishment of Intersect, a members-based organization composed of researchers and engineers. This group works alongside elected representatives to ensure that governance decisions are informed by both technical expertise and community input. Hoskinson describes this system as a “collaborative model” that balances decentralization with the need for coordinated decision-making.

By allowing these representatives to work together and use blockchain-based governance tools, Cardano can develop a unified vision without sacrificing decentralization. “They can talk to each other, vote, and come up with and use a blockchain-based government to ratify a roadmap on a regular basis,” Hoskinson explained.

This structure, he says, addresses the flaws he sees in both Bitcoin and Ethereum. By avoiding Bitcoin’s chaotic governance and Ethereum’s reliance on a single figure, Cardano creates a model that can move forward as a collective but still maintain decentralization.

One of the final pieces of Cardano’s governance puzzle is the upcoming Cardano constitution. Still in development, this document is expected to set hard limits on several core governance issues, such as the supply of ADA and how future governance processes will function. Hoskinson sees this constitution as vital to preserving the integrity of the network while allowing for flexibility and innovation.

The constitution will serve as a framework for Cardano’s decision-making, ensuring that governance remains decentralized and accountable. It will also protect the network from potential governance attacks or centralization of power, something that Hoskinson views as a critical weakness in other blockchain projects.

Ethereum Whale Resurfaces After Two Years, Deposits $9.12M Worth of ETH Into Kraken

In related Ethereum news, a long-dormant whale has stirred the crypto waters by depositing a significant 3,510 ETH, valued at approximately $9.12 million, into the crypto exchange Kraken. This sudden move, highlighted by blockchain tracking platform Lookonchain, marks the first activity from the wallet in over two years, leading many to speculate about the whale’s intentions and the broader implications for the Ethereum market.

The anonymous whale’s connection to Ethereum stretches back to its very inception. This participant was one of the early investors during Ethereum’s initial coin offering (ICO) in 2014, when the cryptocurrency was still in its infancy. At the time, the whale acquired an enormous 150,000 ETH for just $46,500—an investment that, at today’s prices, has skyrocketed to an estimated $389.7 million. This represents an astronomical 838,064% return on investment, making this individual one of the most successful early participants in Ethereum’s history.

Such early adopters, often referred to as “whales,” hold massive influence in the market due to the sheer size of their holdings. When these whales make moves—especially when dormant accounts suddenly come to life—it tends to create ripples throughout the cryptocurrency community, often leading to speculation about market sentiment and potential future price movements.

The deposit of 3,510 ETH into Kraken has sparked concerns about a possible sell-off. When large sums of cryptocurrency are transferred to exchanges, the common assumption is that the holder is preparing to sell, as exchanges like Kraken offer the liquidity necessary for executing significant trades. If the whale does decide to sell the entire deposit, it could increase selling pressure on Ethereum, potentially leading to a price correction.

At the time of writing, Ethereum is trading around $2,637, and while the deposit represents only a fraction of the whale’s total holdings, it comes at a time of heightened volatility in the crypto market. Market participants are now closely watching for any further moves from the whale, wondering if this initial deposit is a precursor to larger sell orders.

Adding to the intrigue around Ethereum’s large holders, another whale wallet, believed to be linked to Genesis Trading and its bankruptcy distribution, moved 5,000 ETH—worth around $12.9 million—to FalconX, a digital asset broker. The wallet in question, known as “0x999,” is thought to be part of the ongoing fallout from Genesis Trading’s financial woes. Despite this significant transfer, the wallet still holds a staggering 162,000 ETH, valued at over $423 million, according to Arkham Intelligence.

This move has intensified concerns about large Ethereum holders potentially selling off their assets, as many believe that the transfer to FalconX could signal a liquidation. FalconX, a platform designed for institutional investors, offers deep liquidity and the ability to facilitate large transactions discreetly. This has led to further speculation about whether the Ethereum being transferred is part of a planned sell-off by Genesis as it navigates its bankruptcy.

The timing of these large transactions has raised eyebrows, particularly given the current state of the broader cryptocurrency market. Ethereum has been under pressure in recent months, with fluctuations in its price driven by concerns over macroeconomic conditions, regulatory uncertainties, and the general cooling of the crypto market after its explosive growth in 2020 and 2021.

For traders and investors, these moves by Ethereum whales could signify an impending increase in selling pressure, which could push prices down further. The fact that both deposits were made to platforms offering significant liquidity suggests that these whales may be preparing to capitalize on their early investments, potentially cashing out at least a portion of their ETH holdings.

Historically, large deposits into exchanges have been interpreted as bearish signals. When whales choose to move their funds to exchanges, it typically means they are preparing to sell, whether to lock in profits or adjust their portfolio exposure. As these large sums of Ethereum enter the market, there could be increased volatility, particularly if other investors react by selling off their holdings in anticipation of a price drop.

Could This Trigger a Broader Market Reaction?

While the moves by these Ethereum whales have certainly caused a stir, it’s important to remember that Ethereum’s market is vast, and it would take a sustained period of large-scale selling to trigger a significant market downturn. However, large investors wield outsized influence in the crypto space, and their actions often have a cascading effect as other market participants react to their trades.

The potential for these large transactions to result in a downward spiral for Ethereum prices is particularly concerning for traders who rely on short-term price movements. However, long-term holders, known as “HODLers,” may view this as a temporary blip in Ethereum’s larger trajectory. Ethereum’s fundamentals, including its transition to a proof-of-stake consensus mechanism and its growing ecosystem of decentralized applications (dApps), remain strong, which could provide a buffer against short-term volatility.

For now, all eyes are on the blockchain as market participants closely monitor whale activity. The deposits into Kraken and FalconX may signal the start of a broader sell-off, but they could also be isolated incidents that do not lead to any significant price movement. Nevertheless, the reactivation of long-dormant Ethereum wallets, particularly from early investors with substantial holdings, will undoubtedly remain a focal point for traders and analysts in the weeks to come.