Cardano founder Charles Hoskinson has proposed converting $100 million ADA from the treasury into stablecoins, aiming to enhance the stablecoin-to-TVL ratio in the network’s DeFi sector.
Goals and Motivations of the Initiative
Hoskinson emphasized the urgency of increasing the stablecoin-to-TVL ratio from the current 10% to between 30% and 40%. He believes the current level is detrimental to Cardano’s growth. He stated: “We can take the $100 million worth of ADA in the treasury, convert it into a mix of stablecoins on Cardano—namely USDM and USDA—and convert some of it into Bitcoin, which makes it Prime Bitcoin DeFi.”
Criticism and Concerns
Some critics have raised concerns that offloading $100 million worth of ADA could pressure the token’s price. However, Hoskinson dismissed such fears as unfounded, arguing that the conversion plan would be managed responsibly and not trigger significant market disruptions. He also countered skeptics’ doubts, labeling them inexperienced and unqualified to assess the strategy’s feasibility.
Potential Consequences of the Plan
If approved, the conversion could signal a major strategic shift for Cardano, positioning the network to better compete in the evolving DeFi and stablecoin sectors. According to DeFiLlama, Cardano’s total value locked (TVL) stands at $356 million, with only $31 million in stablecoins minted on-chain.
Hoskinson's proposal to convert a significant amount of ADA into stablecoins highlights the desire to improve Cardano's position in DeFi, despite criticism and concerns over market pressure.
