Governance is one of the most important challenges in crypto. So I was glad to see a16z publish “The End of the Foundation Era In Crypto.” It’s a serious, thoughtful contribution to a conversation the industry needs to have more openly and often.
There’s a lot in the paper that I agree with. Governance should be outcome-based. Structures should reward performance, not performance signaling. And yes, smart contracts, when used with care, can help encode and enforce trust-minimized rules that align ecosystems around shared purpose.
We’ve embedded those same principles into the Canton Network, where tokenomics are structured to incentivize long-term alignment, and smart contracts govern interoperability and privacy at the protocol level. These aren’t theoretical tools; they’re essential when applied with intention.
The problem a16z identifies, underperforming foundations, is often a symptom, not the root cause. Many exist to mask centralized projects and serve as a form of “decentralization theater.” In those cases, a company is a more effective structure. But where decentralization is real, foundations make sense. a16z rightly cites that the Ethereum Foundation works, which is because Ethereum is meaningfully decentralized. The Linux Foundation is another proven model, supporting a broad, open participant base.
But where we diverge is on the conclusion that foundations have outlived their usefulness. In our view, foundations aren’t the problem, and abandoning them isn’t the solution. When built well, foundations remain one of the most practical tools we have to design resilient, scalable, and inclusive governance for the real world.
The a16z piece frames foundations as structurally outdated: legally constrained, operationally inefficient, and often symbolic more than functional. And in some cases, that’s absolutely right. There are examples of foundations that have lacked transparency, focus, or any meaningful separation from for-profit actors.
However, writing off the model altogether risks ignoring the examples where foundations have worked well. The Linux Foundation and the Canton Network’s Global Synchronizer Foundation (GSF) each play crucial roles in supporting decentralized innovation, coordinating across independent actors, and managing shared infrastructure without resorting to centralized control.
As the industry matures, it’s no longer a debate about theoretical architectures. We’re building financial systems, compliance frameworks, and institutional-grade networks. The real question isn’t “foundations or companies” or “onchain or offchain.” It is, “What governance tools get the job done at scale, under pressure, and with the flexibility to evolve?”
One of the strongest points in the a16z paper is that foundations often fall short because they lack clear market feedback loops or operational efficiency. That’s a fair critique. But replacing them with smart contract-based DAOs or solely corporate-driven developer entities introduces a different risk: over-optimizing for code at the expense of real-world adaptability.
The idea that “code solves governance” sounds elegant, but we’ve seen how quickly it breaks down. The 2016 DAO hack was a foundational lesson in the limits of immutability. More recently, DAOs such as Compound, Uniswap, and MakerDAO have faced challenges, including low participation, stalled decision-making, difficulties executing complex upgrades, and incentive realignments.
These systems didn’t fail because they lacked intelligence. They failed because they lacked institutional flexibility.
Systems that govern trillions in value can’t rely solely on automation. They need the same design maturity we expect from legal, financial, and regulatory institutions: structures that are flexible enough to adapt, resilient enough to endure, and built to manage real-world ambiguity and the unexpected.
The Linux Foundation succeeds not through code, but through process, trust, and neutrality. The GSF, stewarding the Canton Network, plays a similar role– enabling interoperability and governance across independently operated networks, without enforcing a central command structure.
These aren’t theoretical models. They’re production-grade governance in action.
a16z makes a strong case that foundations often lack the feedback loops that drive impact. But that critique assumes foundations can’t evolve, when in fact, many already are.
A well-designed foundation isn’t a symbolic shell or a workaround for decentralization theater. It’s a bridge between early-stage innovation and long-term ecosystem resilience. It provides:
We agree that accountability must improve. But the way forward isn’t to discard foundations, it’s to give them clear mandates, real transparency, and structural mechanisms for adaptation.
One of the central takeaways from the a16z article is that developer companies are better positioned to build, scale, and align incentives. And in many cases, they are.
But we don’t believe there’s a single governance model for all. Real networks need real tools, and that includes foundations, companies, and programmatic mechanisms working together.
The most effective systems blend:
Rather than elevate any one structure as inherently superior, we should build flexible governance frameworks that can evolve as networks grow and as community needs change.
The a16z article ends with a call for incentive-aligned, system-based governance that reduces reliance on good actors and encourages self-regulating networks. We agree wholeheartedly with that vision.
But building that vision doesn’t require eliminating foundations. It requires evolving them – giving them clearer mandates, stronger feedback mechanisms, and better structural alignment with companies and codified protocols.
I’m not defending the past. We’re in favor of building what comes next: governance designed for the complexity of the real world, where openness and execution don’t have to be at odds.
Criticizing foundations without addressing whether the system itself is truly decentralized misses the point. We should be honest about when a foundation is just symbolic, and when it’s a critical tool in a broader governance system that actually reflects shared control.
Crypto’s future will be shaped not just by its architecture, but by the strength of its institutions. If we want systems that endure, we need governance that grows with the communities it serves and responds when the unexpected arrives.
The goal isn’t to “move on” from foundations. It’s to move forward with governance that works.
Because in the end, what matters isn’t ideology but outcomes.