Cardano's DeFi Ecosystem Boosted by $100 Million Stablecoin Conversion Plan

Coin WorldMonday, Jun 16, 2025 12:14 am ET
3min read

Cardano's development momentum has been gaining traction, as evidenced by the rise in key on-chain metrics. Delegated wallets have reached 1.33 million, marking a weekly increase of 0.04%. Concurrently, the total number of native tokens has grown to 10.83 million, indicating a robust expansion of the network's user base and activity. This growth is further supported by rising developer engagement, with new projects continuing to build on Cardano's proof-of-stake foundation. The ecosystem's maturation is reflected in the steady increase in development activity, which is trending upward.

On-chain activity also picked up.

rose to 138,365, with 7,213 written in Aiken. Total transactions climbed to 110.43 million, up 0.20% week-over-week. Registered DReps reached 1,352, showing a 0.44% uptick. GitHub activity surged as well, recording 278 commits—a 32% jump. These metrics underscore the increasing activity and engagement within the Cardano ecosystem, highlighting its growing adoption and utility.

Recent ecosystem highlights include the launch of a USDC/USDM trading pair by Norwegian exchange, and a governance UI update from Yoroi Wallet in response to user feedback. Flow DeFi’s lending protocol entered public testnet, while voting opened for the constitutional committee election, closing July 2. The Cardano Foundation also introduced “Originate,” a traceability tool to authenticate assets through open-source methods. These developments reflect the ongoing innovation and expansion within the Cardano ecosystem, as new products and services are introduced to enhance user experience and functionality.

Cardano’s SRE team upgraded infrastructure to Nix packages 25.05 and Nix 2.29.1, preparing for the upcoming release of cardano-node v.10.6.0. This version will feature a default tracing system, improving monitoring across binary artifacts and Docker images. The consensus team made progress on the Leios protocol, updating the Haskell simulator and fixing snapshot issues in LedgerDB v2. A new CDDL validator was released, and the team published an analysis on modifying the VRF tiebreaker for community input, to be discussed on June 19 at 14:30 UTC. These infrastructure enhancements and protocol updates are crucial for maintaining the network's security, scalability, and efficiency, ensuring that it can support the growing demands of its user base.

Smart contract tooling is also advancing. The Plutus Core team added support for boolean and

case analysis. Plinth’s updates now enable evaluation with the CEK machine, and enhance data conversion using product-type lists. Additionally, the team is rolling out the plutus-metatheory on CHaP to help integrate a certifier into the Plinth compiler. These advancements in smart contract capabilities are essential for attracting developers and fostering innovation within the Cardano ecosystem, as they provide the tools and infrastructure needed to build complex and secure decentralized applications.

Cardano co-founder Charles Hoskinson has proposed a strategic plan to bolster the blockchain network's decentralized finance (DeFi) ecosystem. The proposal involves converting approximately $100 million worth of ADA, Cardano's native token, into a mix of stablecoins and Bitcoin. The primary goal is to increase the stablecoin-backed total value locked (TVL) from the current 10% to a target range of 33-40%. This move aims to foster deeper liquidity for lending, trading, yields, and on-chain activities, thereby stimulating DeFi growth within the Cardano network. Hoskinson's proposal comes at a time when Cardano's DeFi ecosystem lags behind competitors, which have stablecoin-to-TVL ratios of 190% and 110%, respectively. By injecting stablecoin liquidity, Hoskinson believes that Cardano can achieve a more robust DeFi environment, similar to its rivals. The conversion of ADA into stablecoins and Bitcoin is expected to generate sustainable, non-inflationary treasury returns, which could be used to support treasury operations or ADA buybacks.

The mechanics of the proposal involve gradually converting the ADA treasury into stablecoins and Bitcoin over a period of 30-90 days. This approach aims to minimize market disruption by using over-the-counter trades, time-weighted average pricing (TWAP) algorithms, or similar tools. Hoskinson has dismissed concerns about negative market impact, asserting that the move would generate non-inflationary revenue for the treasury. The plan involves allocating 5-10% of the treasury's approximately 1.7 billion ADA, which Hoskinson believes will not significantly affect the token's price. The proposal has sparked debate within the Cardano community. Some members fear that large-scale selling could exert market pressure, while others argue that infrastructure development should precede capital deployment. Proponents, however, see the swap as essential for jump-starting liquidity. Formal discussions on the proposal may begin at the upcoming Rare Evo event, with potential implementation by the end of the year. The plan could lead to stablecoin growth, yield generation, and the evolution of Cardano's governance structure, potentially expanding its sovereign-wealth-style governance and treasury autonomy.

Hoskinson's vision for the proposal includes the creation of a community-elected board to oversee the digital sovereign wealth fund. This board would employ Web3 tools for transparent management, ensuring decentralized control and algorithmic accountability through smart contracts. The proposal reflects a strategic shift within Cardano, focusing on financial market metrics and DeFi activity to compete with other blockchain networks. However, the plan has also exposed divisions within Cardano's leadership, with differing views on the importance of TVL and stablecoin liquidity as adoption indicators. The proposal is currently under internal review, with documents circulating among core Cardano teams and DeFi developers. If momentum builds, broader community discussion could commence as early as the Rare Evo conference. The success of this strategic shift will depend on various factors, including the ability to achieve the targeted stablecoin ratio, generate sustainable yields, and navigate potential governance disputes. The outcome could significantly enhance ADA's utility as a reserve asset or, in a bear scenario, lead to deeper price declines and eroded community trust. Market analysts suggest a middle

may prove most likely, with gradual liquidity improvement and modest yield generation positioning Cardano as a mid-tier DeFi player.