Cardano Founder Reassures Community on $100 Million Sovereign Wealth Fund Impact

Cardano founder Charles Hoskinson has addressed concerns within the Cardano community regarding the potential impact of a proposed $100 million Sovereign Wealth Fund on the price of ADA. In a recent video address, Hoskinson outlined the plan to invest $100 million from the project’s treasury into a sovereign wealth fund. This fund will be composed of a mix of stablecoins native to the Cardano network and potentially some Bitcoin, with the goal of stimulating decentralized finance (DeFi) activity and supporting new financial products on the Cardano network.

Hoskinson’s reassurance comes in response to community fears that the allocation of $100 million worth of ADA could lead to a significant selloff, thereby negatively affecting the cryptocurrency’s price. He emphasized that the deep liquidity of ADA means that such a transaction would not cause a price collapse. Hoskinson noted that Cardano has successfully navigated challenges related to liquidity, exchange listings, and trading, with hundreds of millions of dollars of ADA changing hands daily without visibly impacting its price.

The Cardano founder explained that the volatility in ADA’s price is primarily driven by speculation rather than internal transactions executed by the project’s team. He highlighted that the deep markets of ADA allow it to absorb transactions up to $100 million without significantly moving the price. This perspective aims to reassure the community that the proposed fund will not adversely affect the value of ADA.

Hoskinson has initiated the process for the Cardano Sovereign Wealth Fund by passing a document to the relevant team, who are expected to study and integrate it with the DeFi applications within the Cardano ecosystem. This move is part of a broader strategy to enhance the utility and adoption of the Cardano network, positioning it as a robust platform for financial innovation.