Charles Hoskinson, founder of Cardano, proposed converting $100 million ADA from the treasury into Bitcoin and stablecoins, potentially impacting Cardano's liquidity and DeFi growth.
Hoskinson's $100M ADA Conversion Plan
Charles Hoskinson proposed converting **$100 million ADA from the treasury** into Bitcoin and stablecoins to enhance Cardano's DeFi ecosystem. He stated, "What I’d like to see... is could we take about a hundred million worth of ADA in the treasury and convert it to a blend of a collection of stablecoins…and also convert some of it to Bitcoin to prime the Bitcoin DeFi." Hoskinson suggested using **time-weighted purchases**, OTC desks, and iceberg orders to gradually implement the conversion and **minimize market slippage**.
Community Debates ADA Swap Impact
The proposed swap could **affect ADA’s exchange order books**, but Hoskinson mentions minimal market distortion. Community reactions remain mixed, with **lively debates** on potential impacts. He noted that "Cardano’s low DeFi activity is ‘killing’ the network." Initial reactions demonstrate a **focus on liquidity improvements** within the cryptocurrency community.
Treasury Swap Outcomes in Layer 1 Protocols
Other layer 1 protocols, like Ethereum and Solana, have **used treasury swaps** to enhance their DeFi ecosystems, typically resulting in neutral or positive long-term outcomes. While sharp sell-offs are rare with OTC methods, market sentiment may shift. Data on liquidity suggests **limited immediate effects**, but broader implications are worth monitoring. Hoskinson stated that "The planned methods would limit market distortion to no more than 50 basis points worth of slippage."
Charles Hoskinson's proposal to swap $100 million ADA for Bitcoin and stablecoins aims at ambitious goals for improving Cardano's DeFi ecosystem, even as community reactions continue to spark debate.
