Cardano to Diversify $100 Million Treasury for DeFi Growth

Cardano is set to revamp its $1.2 billion treasury by converting approximately $100 million worth of ADA into a diversified crypto fund. This strategic move, proposed by founder Charles Hoskinson, aims to enhance DeFi growth and financial stability by investing in yield-generating assets. The new plan includes stablecoins such as USDM, USDA, and IUSD, along with Bitcoin and synthetic assets, to create a self-sustaining treasury model similar to global sovereign wealth funds.

The fund will be utilized to purchase additional ADA, thereby multiplying the long-term treasury by returning earned funds. This approach seeks to minimize reliance on network inflation and transaction fees, thereby increasing the ecosystem's financial independence. One of the primary goals of this initiative is to improve DeFi liquidity within the Cardano network, which currently stands at less than 10 percent, significantly lower than Ethereum's 190 percent and Solana's 110 percent.

Cardano aims to raise its stablecoin percentage to at least 33 percent. By introducing liquid assets, the platform expects to boost trading activity, enhance consumer confidence, and facilitate the listing of native stablecoins on major exchanges. Additionally, Hoskinson has proposed the establishment of a new treasury board to oversee the management of the fund. This board will be elected to manage the assets, with each member competing to deliver the highest returns, thereby bringing decentralization and accountability to treasury operations.

This governance structure will also provide an opportunity for knowledgeable financial experts within the community to volunteer their services in managing Cardano funds. In the future, the treasury may be further diversified by including tokens from partner networks, such as the KNIGHT token of Midnight, which will be integrated and managed via additional infrastructure as the platform develops.

Cardano's $100 million crypto fund plan represents a bold shift in treasury strategy, designed to strengthen DeFi liquidity, improve financial sustainability, and build a decentralized structure for long-term ecosystem growth. This move underscores Cardano's commitment to decentralized finance and its dedication to fostering innovation and growth within the broader crypto ecosystem. By investing in DeFi projects, Cardano is positioning itself as a key player in the future of finance, attracting more users and developers to its platform.