Cardano Founder Hoskinson Defends Stellar Against Criticism

Cardano founder Charles Hoskinson has publicly defended Stellar after the network faced criticism over its collaboration with the Depository Trust & Clearing Corporation (DTCC).

The controversy began when DTCC announced plans to tokenize DTC-custodied assets on the Stellar network by the first half of 2027. While many in crypto and traditional finance welcomed this, some critics questioned Stellar’s blockchain security.

Criticism Over Stellar’s Consensus Model

Crypto commentator Omid Malekan argued that Stellar “is not a legitimate blockchain” because it supposedly lacks economic security. He criticized Stellar’s Stellar Consensus Protocol (SCP), which relies on trusted validator relationships instead of open economic competition seen in proof-of-stake or proof-of-work networks.

Interestingly, Stellar developer Garand Tyson responded sarcastically by agreeing with some points. Tyson noted that Stellar validators are publicly known, cannot perform MEV extraction, and rely on community trust rather than token incentives.

Hoskinson Steps In

Hoskinson defended Stellar, questioning the hostility toward the network. He stated that Stellar is “perfectly legitimate technology” and implied that not all blockchain systems need to follow the same model to be valid.

This isn’t new territory for Hoskinson. He has maintained a positive relationship with Stellar and its founder Jed McCaleb for years. In 2024, he revealed they communicated and called the Stellar team “good people.” His support dates back to 2017, when he said he wanted the Stellar ecosystem to succeed and praised the Stellar whitepaper.

Market Context

In July 2025, Hoskinson congratulated Stellar’s XLM token after it rallied over 100% to $0.5194, calling it proof that the ecosystem survived difficult cycles. However, XLM has since fallen to $0.1702 due to broader market downturn. Despite this, it gained 15.59% in the past 24 hours while most major coins remained red.

It’s worth noting that Hoskinson’s defense might seem surprising given Cardano’s own proof-of-stake model. But he’s always argued that different blockchain architectures can coexist and serve different purposes. The DTCC partnership, if successful, could prove him right about Stellar’s legitimacy in traditional finance.

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