Cardano founder Charles Hoskinson has issued a direct warning that XRP's push into decentralized finance (DeFi) on Cardano could spark an immediate 10% market correction. In a hard-hitting interview on 'The O Show,' Hoskinson challenged the fundamental value proposition of XRP, asserting a critical disparity between Ripple's corporate profitability and token holder benefits. He emphasized that Midnight (NIGHT) creates value through utility and direct network growth rewards, a model he claims XRP lacks as Ripple 'segregates profits from XRP investors.' Hoskinson's critique comes as integration efforts between the two ecosystems intensify, placing tokenomics under intense scrutiny.

Hoskinson says Midnight prioritizes community-first distribution

Hoskinson said the lack of staking mechanisms indicates that XRP’s model doesn’t prioritize returns for holders. He compared XRP to Tether, portraying it as a tool in which people pay for utility, yet all the true profits go to a central authority rather than being pocketed by holders.

He drew a sharp contrast with Midnight, explaining that the NIGHT token is designed to align the network’s success with users’ actual activity. He contended that distribution for the NIGHT token spanned eight ecosystems, including Cardano and XRP.

However, because it required users holding over $100 at the snapshot to submit a manual claim, only a tiny percentage of the total supply was distributed to the community. Nonetheless, this is a far cry from XRP, where about 80% of the 100 billion supply was concentrated in Ripple’s hands at launch.

However, some XRP proponents did not take too kindly to Hoskinson’s remarks. Critics claimed the Cardano founder has always been preoccupied with Ripple, pointing to his past comments as evidence. Hoskinson and the XRP camp have been at odds for years, and despite a temporary truce after the 2024 election, it seems the old rivalry is back. Post-reconciliation, Hoskinson had outlined a plan to mend fences that involved adding XRP to the Lace wallet and fostering growth in XRP’s DeFi landscape.

Hoskinson reignited the feud after he slammed Garlinghouse’s endorsement of the CLARITY Act, arguing the bill creates a protected class for XRP while strangling innovation for everyone else.

Hoskinson says they will still incorporate XRP into Cardano DeFi

Nonetheless, more recently, Hoskinson reaffirmed that efforts to integrate XRP into Cardano’s DeFi ecosystem are still on track. Speaking on his recent criticism of XRP and how it may have affected their partnership, he asserted that a truly decentralized network shouldn’t be rattled by criticism of one leader. He claimed that a robust, decentralized platform should be able to withstand external criticism of its leadership without it being treated as an existential threat.

He explained on X: “If XRP is so centralized that criticism of a single person’s conduct and lobbying means the ecosystem is shut off, then they aren’t decentralized.”

Earlier, during a discussion with Scott Melker, Input Output Global CEO, he had also stated, “Midnight connects us to all the other blockchains, and we add privacy to all those connection points, so we have a lot to add and offer.”

Meanwhile, Solana is already fast-tracking the integration of XRP into its DeFi ecosystem. XRP holders can now access Solana’s lending and trading pools via wrapped XRP (wXRP), thanks to a custody-and-mint model provided by Hex Trust and LayerZero. The token is pegged 1:1 to XRP secured on the XRP Ledger, allowing funds to flow into Solana-based applications.

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