Did MELD, one of Cardano's largest projects, rug their community?

Who is MELD?

MELD is a decentralized finance (DeFi) protocol, that has recently announced that it will be moving from Cardano to Avalanche to expand its financial products in the Web3 and Financial categories. MELD's mission is to bridge the gap between traditional finance and cryptocurrency, fostering financial inclusion in the decentralized finance space. The partnership with Avalanche will leverage its subnet technology to provide better control over security infrastructure, opportunities to customize offerings, enhanced performance, and scalability, without compromising interoperability.

By building its subnet on Avalanche, MELD will expand the utility of MELD tokens, which will be used to settle transaction fees for the Avalanche Network. This move benefits the native community, as it gives them more control over security infrastructure, without affecting the AVAX coin price prediction. MELD CEO Ken Olling believes that the collaboration will enable them to offer a better user interface and a seamless experience to users managing their assets more effectively.

MELDapp, MELD's DeFi non-custodial banking protocol, is also live, allowing customers to borrow fiat currency against their digital assets. MELDapp currently supports Avalanche, BSC, BTC, Cardano, and the MELD network, with more networks to be added in the future. MELD aims to provide financial services to everyone, irrespective of their background or geographical location.

The company raised approximately $45 million through private token sales and an Initial Stake Pool Offering (ISPO) on Cardano.

The move to Avalanche

MELD's expansion to other blockchain networks, such as Avalanche and Polygon, has caused concern among Cardano Maximalists, as they worry that MELD's move to other chains will reduce its loyalty to the Cardano network. However, Olling has addressed these concerns, stating that the company's loyalty to Cardano will remain unchanged. They will continue using Cardano's stake pool mechanisms, initial stake pool offerings, and other operating systems to develop its protocol. The below tweets are just some of the conversations around whether this move by MELD constitutes a rug on the Cardano community. Needless to say, this has been hotly debated with those sharing views from both sides of the argument.

It seems the expansion is seen as a healthy addition to the protocol by investors, but MELD needs to work towards meeting its goals to fully regain the trust of its investors. The company launched in Q2 of 2021, and its roadmap for Q3 shows that it had not met all of its targets at the time. MELD is nearly two years old, and the company needs to focus on meeting its goals to regain the trust of its investors fully. As is evidenced by the below price chart.

Flagship Thought

I fully appreciate the frustration of the Cardano community around the news of MELD moving some of its operations to the Avalanche chain. Meld is one of Cardano's biggest projects and they raised significant capital from the community. Since then they have been comparatively quiet, for example, I was surprised not to see any team presence at the Cardano summit last year. They have also been significantly delayed in their releases, but this is to be expected when attempting such an ambitious project.

I am all for interoperability and believe firmly that the future of blockchain is cross-chain solutions. I think MELD's communication has let them down. I don't think they made it clear what this move means for current Cardano native token holders. They haven't been forthright in explaining why this solution could not be fully rolled out on the Cardano blockchain and the comms around the move feel more like a complete move to Avalanche than a cross-chain launch.

Having said the above, I don't think MELD has rugged the Cardano community, as some are claiming, and I hope in the months to follow we will see exactly how they intend to use the strengths of both Avalanche and Cardano to deliver on their mission. If done correctly this could be an example to the broader blockchain space of how a project can deliver on its mission by combining different infrastructures to deliver a solution in the most effective way.