Cardano Founder Proposes Crypto Insurance and Criticizes Ethereum Governance

Charles Hoskinson, founder of Cardano, argued that the cryptocurrency industry must prioritize safety and governance over transaction speed to achieve mainstream adoption. Speaking in a July 23 interview, the Ethereum co-founder sharply criticized his former network's development model while proposing a new insurance framework for digital assets.

Hoskinson contended that Ethereum lacks a sustainable on-chain treasury to fund long-term development, leaving it dependent on a few influential organizations. He argued that true decentralization requires token holders to dictate network priorities through on-chain voting rather than relying on large corporations to shape the roadmap.

Highlighting the financial scale of this structural gap, Hoskinson noted the potential revenue generated by a formalized treasury. "If Ethereum was to just take 5% of protocol revenue and give it to the Ethereum Foundation, they'd have $390 million a year to work with," he said.

While acknowledging that Cardano’s own governance framework took longer to build, Hoskinson maintained it offers a more durable model for the future. He suggested that the industry's focus on rapid deployment is losing its appeal amid escalating cybersecurity threats. "People are starting to wake up, especially in the age of AI hacking where everything is getting broken, that speed to market is not necessarily the most desirable thing," he said.

An Insurance Layer for Digital Assets

The push for better security follows a recent exploit targeting infrastructure related to Cardano. Hoskinson identified the absence of a comprehensive insurance mechanism as the most critical missing component in the digital asset ecosystem.

He proposed optional coverage for cross-chain bridges and crypto wallets, funded by user premiums and supported by collateral pools. Protocols that satisfy specific security benchmarks would qualify for this protection, with users paying recurring fees to maintain their coverage.

This system would compensate hack victims while simultaneously incentivizing developers to adopt stronger software practices. "You need financial systems with rule of law and checks and balances and the ability to get restitution when bad things happen," he said.

Hoskinson expects the next major wave of adoption to stem from integrating blockchain with identity, privacy, insurance, and real-world financial infrastructure. This perspective suggests that future market growth will rely on consumer protections and institutional-grade safety rather than simply increasing transaction throughput.