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Cardano can't be copied

Published 15.5.2023

What's the first answer that comes to mind when someone asks you what Cardano is? If you answer something like it's a decentralized blockchain, you might be right, but only partially. Cardano, but basically any other public blockchain, has to be much more than just a piece of software with protocol implementation. The community, the team, fair token distribution, and many other details are equally important for the success of the project. These key attributes cannot be bought with VC money. Cardano is an open-source project. Anyone in the world can read academic studies or copy the source code. Yet it is not possible to copy Cardano. VC money can't buy community or decentralization. Marketing and high TVL can never replace a loyal community and users for whom the protocol can change their lives.

TLDR

VC funds try to buy time and trust with money. These attributes cannot be bought, so short-term speculators join VC-backed projects in particular. They will leave as soon as the VC funds sell their bags. If someone were to copy Cardano, they would find that they launched a half-dead project. No copy has historically been better than the original.

Cardano is a runaway train

Blockchain is a disruptive technology that will change the world. This is quite obvious. Many new projects are trying to ride on the success of their predecessors and capture at least part of the market. However, only a few projects have a chance to succeed in a highly competitive environment. At this point, one thing is clear. All VC-backed projects are likely to fail. New ones will pop up over and over again, and maybe some institutions will use them. The most important thing they never manage to get and that is community. A community built from the bottom up is an extremely important attribute for success. A project without a community is like a startup trying to succeed in an almost-lost race. Only the community can ensure the win.

The community must be an integral part of the project that decides its future. Cardano has had such a community from the very beginning, and it is growing all the time. Without the community, its feedback, and the ability to vote on changes, the project would essentially be run by just the team. Such a project is uninteresting from the point of view of decentralization because what blockchain brings to the world is first and foremost the transfer of power back into the hands of the people.

VC-backed projects try to buy trust and time with money. However, this is not possible.

It takes years to build a community and is the hard work of many individuals working independently of each other. Only a long bear market can test the loyalty of fans and users. If the community grows and is excited about technological advancements even during a bear market, that's a good sign. Money can't buy trust in the protocol and the team. Trust grows with time and with the number of users who are convinced of their choice. The utility of the protocol is a guarantee of user growth.

VC-backed projects usually behave in such a way that the investors and the team hold most of the coin. Only a small portion is sold to the public. With this approach, VC funds can only buy short-term speculators, but certainly not people who have been in the blockchain industry for a long time and know that fair coin distribution is key to decentralization. This is especially true for PoS projects like Cardano.

Money cannot buy decentralization. There are roughly 3200 registered pools and 1.2M stakers in the Cardano ecosystem. Although one entity can operate multiple pools, there is a lot of interest in this activity. In order to operate a pool, the cost of this activity must be as low as possible. VC-backed projects do not try to achieve high decentralization, but high scalability, at the expense of decentralization. Running the nodes of such a project is often very expensive and unaffordable for ordinary users.

Even if staking is financially attractive, once VC funds sell their coins, they essentially betray all stakers. In Cardano's case, no ADA coins were purposefully sold to VC funds. Most ADA coins are in circulation and the 3 entities building Cardano hold a fair amount.

VC money can buy a great team that can quickly deliver a workable solution to the market. This is probably the only advantage of VC-backed projects. The IOG team is well funded and thanks to the Cardano treasury, it will be for years to come (or other teams can participate in the development). Cardano can remain independent of VC funds.

It is important to note that the IOG team has years of hard work behind it both at the level of research and implementation. If you have a lot of money, you can buy the time of the best experts in the market, but it can take years to build a high-functioning team that is passionate about the project's mission.

The IOG team uses formal methods for development, which is a slower process than typically used in software development. The reality is that today it is almost impossible to catch up with the technical lead and the quality of implementation behind Cardano. It is not easy even for the greatest experts to understand all the publicly available studies and implement the technologies described in them.

What if someone copies Cardano?

New projects can learn from their predecessors and even use already-implemented technologies. What if someone copies the Cardano protocol and launches it again under a different name?

If anyone attempted such a thing, they would soon find that they had launched a half-dead network. How many people would be interested in running pools? How many people would want to stake the coins of such a project? What would be the distribution of coins among users? What would the team work on? What about the Lindy effect? Cardano has been around since 2015. You could buy ADA coins in 2017. A new project would essentially be starting from scratch while the Cardano network has never needed a network restart in its entire existence.

The IOG team is implementing the second layer named Hydra and has a plan to improve the PoS protocol. The new team would have to continue everything that the IOG team is already doing or do something similar.

However, the most difficult part would be to build a community. The source code can be copied. Even completely free. The community cannot be copied. Can you imagine how much trust people would have in a project known to be just a copy of Cardano?

After the success of Bitcoin, many people tried to build a new project by simply copying its predecessor. Probably the most famous copy is Litecoin. Dogecoin is a copy of Litecoin. Each subsequent clone was worse because it had a smaller team, a smaller community, and people trusted it less. These projects brought minimal innovation. There was no objective reason why the copy should be better than the existing original.

Cardano is a completely new project from the ground up, which has not copied anything from its predecessors at the source code level. Only concepts were copied, such as Nakamoto-style consensus, the UTXO model, the concept of smart contracts, etc. However, all concepts were significantly improved. Cardano uses a PoS Nakamoto-style consensus, Extended-UTXO accounting model, and the Plutus platform is fundamentally different from the Ethereum Virtual Machine (EVM).

If someone made a copy of Cardano, sooner or later the original would still get a technological edge. Moreover, the community would remain loyal to Cardano. Newcomers usually go where there are already a larger number of people. Basically, there is no reason to choose a copy. The network effect and Lindy effect of Cardano will always be greater than what a copy can offer.

Imagine the huge number of wallets, DeFi projects, NFTs, integration with HW wallets, and listing on exchanges. Cardano has been in the top 10 for over 5 years, so many people have heard of it. There are many influencers on social networks who have many followers. Thanks to the Cardano Foundation, there are many active and diligent ambassadors in the ecosystem. The IOG team has partnerships with many institutions and governments. The number of new stakers and users is growing every day. Cardano is a huge ecosystem with its history and a large number of people who trust the protocol. All that cannot be easily copied.

Conclusion

Bitcoin and Ethereum have most certainly crossed the line of unstoppability. We dare say that Cardano has already crossed this threshold as well, or will soon cross it. Although Cardano can be seen as a mix of the best of Bitcoin and Ethereum, it is an original with a strong team, a huge community, a rich ecosystem, and a long history. Although it is said that money can buy almost anything, this is not true in the case of Cardano. What Cardano brings is change and hope that the world can be a better place to live. VC funds do not strive for this, therefore they have no chance to copy Cardano. Cardano can be seen as a movement or a technological tool that will enable people to make a peaceful but fundamental change in our society. Let's have the courage to strive for this change.

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