Charles Hoskinson, co-founder of Cardano, has proposed the idea of converting $100 million in ADA from the project's treasury into Bitcoin and stablecoins to improve liquidity and grow Cardano's decentralized finance ecosystem.
Proposal for Asset Conversion
Hoskinson discussed the potential use of $100 million ADA to shift towards stablecoins such as USDM and USDA, as well as ADA-backed synthetic stablecoins. He also opined that some of these funds could be converted into Bitcoin to further DeFi around BTC.
Issue of Low Stablecoin to DeFi Ratio
Hoskinson noted that the current ratio of stablecoins to total value locked in Cardano is under 10%, which is significantly lower than competitors like Ethereum and Solana. He believes this situation is 'killing Cardano' and suggests that his proposal could help achieve a ratio of 33% to 40%, which would positively impact the ecosystem.
Potential Effects and Fund Management
Additionally, he discussed creating yield-generating instruments and potential governance structures, including an elected board to manage the decentralized Cardano sovereign wealth fund. Hoskinson emphasizes that the generated income could be used to buy back ADA, possibly increasing demand for the token.
Hoskinson's proposal for asset diversification could play a key role in addressing Cardano's liquidity deficit, but its implementation depends on various factors, including market conditions.
