Cardano announced a shift in its financial management strategy by converting part of its treasury into an investment fund aimed at enhancing liquidity in decentralized finance.
Strategic Shift in Treasury Management
Founder Charles Hoskinson has proposed converting approximately $100 million worth of ADA into yield-generating assets to encourage DeFi growth and financial stability. This move signifies a substantial change in the company's financial policy, as, in addition to holding non-productive ADA, stablecoins like USDM, USDA, and IUSD will be included, alongside Bitcoin and synthetic assets.
Improving DeFi Liquidity within Cardano Network
One of the key objectives of this initiative is to improve DeFi liquidity within the Cardano network. Currently, the ratio of DeFi stablecoins is less than 10 percent, while Ethereum and Solana see significantly higher ratios at 190 and 110 percent, respectively. Cardano aims to achieve at least a 33 percent stablecoin share.
New Governance Structure for the Fund
In addition to financial reforms, the proposal introduces a governance structure to oversee the new fund. A board will be elected to manage the assets, with each member competing to deliver the highest returns. This approach brings decentralization and accountability into treasury operations.
Cardano’s plan to create a $100 million crypto fund signals a bold shift in treasury strategy aimed at strengthening DeFi liquidity and building a resilient financial ecosystem.
