- Hoskinson proposes reallocation of ADA to Bitcoin and stablecoins
- Highlights dangerously low 10% stablecoin-to-TVL ratio
- Aims to strengthen Cardano’s liquidity and ecosystem growth
Cardano founder Charles Hoskinson has proposed a significant shift of $100 million worth of ADA reserves into Bitcoin and native stablecoins—USDM and USDA. He argues that the current 10% stablecoin-to-total value locked (TVL) ratio is “killing Cardano,” limiting the platform’s financial flexibility and decelerating DeFi adoption.
Cardano’s TVL is approximately $356 million, but only $31 million is held in stablecoins. According to Hoskinson, this imbalance weakens Cardano’s usability as a lending and trading hub since stablecoins are essential for reducing volatility risk and encouraging liquidity.
Why Bitcoin and Stablecoins?
Hoskinson suggests using Bitcoin as a reliable value store and USDM/USDA stablecoins for on-chain liquidity. The proposed reallocation from ADA reserves aims to:
- Reduce systemic volatility
- Support easier trading and lending
- Attract more DeFi developers with improved infrastructure
This would place Cardano more competitively alongside ecosystems like Ethereum and Binance Smart Chain—where stablecoins already dominate liquidity pools and TVL dynamics.
Addressing Market Concerns
Critics fear that converting a massive ADA reserve could disrupt its market price. Hoskinson, however, dismisses this, noting that the Cardano treasury has been planning and building mechanisms—such as gradual reallocation and strategic execution—to avoid negative market shocks.
He emphasized that no ecosystem can grow sustainably without stability, and without this move, Cardano risks losing relevance as DeFi and yield opportunities shift to more stablecoin-rich platforms.
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