Cryptocurrency prices have recently plummeted, leaving investors stunned and speechless. According to foreign media reports , Cardano founder Charles Hoskinson publicly stated in a live stream that he has lost $3 billion in his account. However, he will not give up on cryptocurrency investments.
This alarming figure has sparked considerable discussion within the industry, but frankly speaking, it is a Paper Loss calculated from ADA's historical high, rather than a true cash loss.
According to Forbes data, Charles Hoskinson's estimated net worth in 2022 was between $500 million and $600 million. So, where did this money come from? And how did the Cardano team build this hidden fortune?
IOHK's money printing mechanism
To understand the funding sources of the Cardano ecosystem, we must go back to 2017. At that time, Cardano conducted an ICO, issuing a total of 45 billion ADA tokens, of which 25.9 billion were released during the fundraising phase, successfully raising approximately $79.2 million. But the real key lies in the token distribution mechanism.
According to token economics analysis , 20% of the initial supply, approximately 5.18 billion ADA, was directly allocated to three core entities: IOHK (now renamed IOG), responsible for technology development; Emurgo, responsible for commercial promotion; and the Cardano Foundation, responsible for regulatory coordination. IOHK, led by Charles Hoskinson, received the lion's share, approximately 2.46 billion ADA.
Based on the current ADA price of approximately $0.26, IOHK's original token reserves alone have a book value exceeding $600 million. This does not include the staking rewards rewards generated over the years through the PoS (Proof-of-Stake) mechanism.
Simply put, IOHK's operating costs were already zero in 2017, and every ADA sold thereafter is pure profit. This is why they can support hundreds of engineers to write academic papers and conduct peer reviews, without having to worry about external VCs (venture capitalists).
The cost of $3 billion
Charles Hoskinson emphasized that the $3 billion in paper losses was the price he paid for rejecting "toxic capital." He made it clear that he would not play leverage games with FTX's SBF, nor would he cultivate problematic networks like those of Epstein.
This statement might sound like an attempt to distance himself, but from another perspective, it's also about drawing a line. Against the backdrop of FTX's collapse and multiple projects being revealed to be linked to suspicious funds, Charles Hoskinson's remarks are actually sending a signal to the market that Cardano's funding sources are clean and haven't been tainted by speculative capital from Wall Street and Silicon Valley.
