The Cardano community is currently embroiled in a lively debate over a withdrawal proposal submitted by the SNEK team. The proposal requests 5 million ADA from the Cardano Treasury to cover listing fees on top-tier centralized exchanges (CEXs), arguing that such a move would boost SNEK’s visibility and benefit the broader ecosystem. However, the vast majority of Delegated Representatives (DReps) have voted "NO," highlighting deep divisions within the community. This article explores the details of the SNEK proposal, the governance challenges it faces, and the broader implications for Cardano, drawing lessons from platforms like Solana to provide context. What is SNEK? SNEK is a meme coin on the Cardano blockchain, notable for being one of the largest in terms of trading volume within the ecosystem. Meme coins are typically launched as humorous or speculative projects, often lacking the serious utility of other blockchain initiatives. Despite this, SNEK has cultivated a significant following and generates substantial transaction activity. While the SNEK team is working to expand its scope beyond its meme coin origins, many in the community—especially newcomers—still perceive it as a speculative venture, raising questions about its role in Cardano’s future. The Proposal: 5 Million ADA for CEX Listings The SNEK team has proposed withdrawing 5 million ADA from the Cardano Treasury to pay listing fees on major CEXs like Binance, Coinbase, KuCoin, Bybit, and others. These platforms charge hefty fees to list new tokens, often in the millions, as part of their business model. The team argues that a presence on these exchanges would increase SNEK’s adoption and visibility, driving traffic to Cardano and enhancing its reputation. However, the proposal has met with strong resistance. At the time of writing, 40 DReps have voted "NO," while only 5 have voted "YES." Governance Missteps: A Procedural Oversight Complicating matters, the SNEK team neglected to submit an "info governance action" before their withdrawal request. In Cardano’s governance framework, this preliminary step is crucial for transparency and compliance. Without it, the withdrawal proposal may be deemed unconstitutional, meaning it fails to meet the ecosystem’s established rules. While the Cardano Constitutional Committee (CC) judges constitutionality, DReps are voting based on the proposal’s substance rather than its procedural flaws. Unfortunately, few DReps have provided detailed rationales for their votes, leaving the SNEK team with limited feedback on how to refine their approach. A Divided Community: Meme Coins vs. Treasury Priorities The request for 5 million ADA has split the Cardano community into two camps. Many community members oppose using treasury funds to support a meme coin, viewing it as a frivolous or risky endeavor. They argue that Cardano’s resources should prioritize projects with clear utility and long-term value, fearing that backing SNEK could tarnish the ecosystem’s credibility. The SNEK community counters that their token offers unique value, driving more marketing and engagement for Cardano than many "serious" projects. They point to SNEK’s high transaction volume as evidence of its potential to attract new users and bolster network activity. Charles Hoskinson has publicly opposed the proposal. In a post on X, he declared that no project—including Midnight, another Cardano-affiliated initiative—should use treasury funds for listing fees. His stance suggests that projects should seek alternative funding sources, such as private investment or revenue, rather than relying on communal resources. The Economics of CEX Listings: A Misconception The SNEK team has suggested that listing their token on a top-tier CEX could "open the door" for other Cardano projects. However, this claim is misleading. CEXs operate as businesses, requiring each project to pay its own listing fees—often in the millions—regardless of prior listings from the same blockchain. If SNEK were granted 5 million ADA, it would not reduce costs for other Cardano assets. Instead, it could set a precedent, prompting a wave of similar requests from other projects. Such a trend might strain the treasury’s reserves, raising questions about sustainability. The Pros and Cons of Meme Coins in Cardano SNEK’s status as a meme coin lies at the heart of this debate, offering both opportunities and risks. Benefits Transaction Volume: SNEK generates significant activity on Cardano, contributing to transaction fees that support the network. User Acquisition: Its popularity can attract new users, serving as an entry point to the ecosystem. Innovation: The SNEK team’s efforts to build new features demonstrate potential beyond its meme coin roots. Drawbacks Speculative Nature: Meme coins are often associated with pump-and-dump schemes, where early investors profit while others face losses. Reputation Risk: Supporting SNEK with treasury funds could signal that Cardano endorses speculative projects, deterring serious developers and investors. Perception: Despite its ambitions, SNEK is still widely seen as a meme coin, which could confuse or alienate newcomers. Granting treasury support to SNEK might be interpreted as legitimizing meme coins, a move that could conflict with Cardano’s mission to foster impactful decentralized solutions. DRep Feedback: Key Concerns While most DReps have not explained their "NO" votes, those who have offered rationales highlight several flaws in the proposal: No KPIs: The proposal lacks clear key performance indicators to measure the success of a CEX listing. Missing Market Analysis: There’s no evaluation of how listing SNEK on Kraken impacted the market or Cardano as a whole, and what is expected from a potential listing. No Repayment Plan: The SNEK team hasn’t proposed returning ADA to the treasury if the listing proves profitable. Limited Ecosystem Benefit: Listing SNEK won’t lower listing fees for other Cardano projects. These critiques underscore the need for more robust planning and accountability in treasury fund requests. Lessons from Solana: The Meme Coin Dilemma To understand the stakes, consider Solana, a blockchain notorious for its meme coin boom. Solana’s ecosystem generates massive traffic and volume from these tokens, but this has come with a dark side: scams, rug pulls, and significant investor losses. Some have dubbed Solana a "CrimeFi" platform, reflecting the reputational damage caused by unchecked meme coin proliferation. While some meme coin teams may have genuine intentions, many are outright scams, exploiting hype for quick profits. This cautionary tale illustrates why treasury support for meme coins is so contentious. Cardano cannot—and, due to decentralization, could not—ban meme coins outright. However, funding them from the treasury risks endorsing projects that could harm the ecosystem’s integrity. Conclusion: A Defining Moment for Cardano The SNEK proposal has thrust Cardano into a critical discussion about its priorities and identity. Meme coins like SNEK can invigorate the ecosystem with activity and attention, but they also carry risks of volatility and reputational harm. The strong "NO" vote from DReps signals a community wary of using treasury funds for such ventures, favoring a cautious approach to resource allocation. This debate showcases the strength of Cardano’s governance model, where DReps and community members actively shape the ecosystem’s direction. As Cardano evolves, it must strike a balance—embracing innovation and experimentation while safeguarding its long-term vision. The SNEK proposal may not succeed, but it has sparked a vital conversation about what Cardano stands for and how it allocates its communal wealth. Final Thoughts Whether SNEK fades into obscurity or reinvents itself beyond its meme coin label, its proposal has left a mark on Cardano. The community’s response will guide future decisions, ensuring that the ecosystem remains a hub for meaningful progress while navigating the wild, unpredictable world of blockchain experimentation.
