- Hoskinson suggests swapping $100M ADA treasury into BTC and stablecoins.
- Goal is to raise stablecoin-backed TVL from ~10% to ~33–40%.
- Plan aims to generate sustainable, non‑inflationary treasury returns.
Context of the Proposal
Cardano co‑founder Charles Hoskinson recently shared a bold strategy during a YouTube livestream: convert around $100 million worth of ADA from the treasury into a mix of stablecoins (USDM, USDA) and Bitcoin. The goal? To strengthen Cardano’s fledgling DeFi ecosystem. Currently, only about 10% of Cardano’s total value locked (TVL) is backed by stablecoins—roughly $31–33 million out of a $330 million TV. Hoskinson believes injecting stablecoin liquidity will be transformational.
Why It Matters to Cardano DeFi
DeFi ecosystems like Ethereum and Solana enjoy stablecoin-to-TVL ratios of 190% and 110%, respectively. Cardano’s low ratio is “killing” its DeFi growth, according to Hoskinson. His plan aims to elevate Cardano’s stablecoin-backed TVL to around 33–40%, fostering deeper liquidity for lending, trading, yields, and on-chain activities.
Mechanics and Market Impact
Hoskinson suggests liquidity can absorb the conversion gradually via over-the-counter trades, TWAP algorithms, or similar tools over 30–90 days—minimizing disruption . The treasury could safely allocate 5–10% of its ~1.7 billion ADA without significantly affecting token price. He dismisses warnings of negative impact, and stresses the move would generate “non-inflationary revenue” for the treasury .
Community Reactions & Next Steps
The proposal has sparked debate. Some fear market pressure if large-scale selling occurs, though Hoskinson refutes this as a “false narrative”. Critics argue infrastructure should come before capital deployment, while proponents see the swap as essential for jump-starting liquidity. Formal discussions may begin at the upcoming Rare Evo event, with implementation possibly by year‑end
What Could Come Next
- Stablecoin growth: Targeting 33–40% of TVL could unlock advanced DeFi use cases.
- Yield generation: Gained BTC and stablecoins could generate income to support treasury operations or ADA buybacks.
- Governance evolution: The plan could expand Cardano’s sovereign-wealth-style governance and treasury autonomy.
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