Cardano Founder Backs Stablecoin Ecosystem Amid CEO's Passing, 50% Valuation Cut
1min read Charles Hoskinson, the founder of Cardano, has expressed his backing for the blockchain's stablecoin ecosystem following significant challenges faced by USDM, a key stablecoin project within the Cardano network. Hoskinson's support comes after the sudden passing of USDM's CEO, Matthew Plomin, on November 14, 2024, due to health complications. Despite this tragedy, Hoskinson's message emphasized the project's resilience and future potential.
Ask Aime: "Will Cardano's stablecoin ecosystem overcome USDM's CEO passing?"
Hoskinson's tweet highlighted the recent setbacks faced by USDM, including the death of its CEO, but also conveyed optimism about the project's future. "We support the Cardano stablecoin ecosystem and want to see it grow and thrive. USDM has had some heavy blows including the death of its CEO, but has risen and has a bright future," Hoskinson stated.
Hoskinson's comments followed the disclosure of significant changes to W3i Software, the company behind USDM, as revealed in an SEC filing. The filing detailed a 50% reduction in pre-money valuation from $40 million to $20 million, a restructuring at the executive level, and a $1.5 million investment from Input Output Global (IOG).
The SEC filing also outlined the terms of the investment, which included a nonbinding term sheet for Series A Preferred Stock financing at $1.00 per share. The agreement features standard preferred stock provisions such as liquidation preference, protective provisions, board representation, and seven-year redemption rights exercisable. Additionally, the investment terms allow for the option to purchase an additional $500,000 worth of preferred stock at the same ratio in 18 months from closing.
W3i Software's SEC filing acknowledged several risks associated with building on the Cardano blockchain. The report stated that the company relies on the development progress of Cardano, which introduces uncertainties that could influence its operations. The incomplete roadmap of Cardano creates uncertainties about future development, technological innovation, and the timeline of implementation. This public support from Hoskinson for USDM is crucial as the project navigates through a leadership transition and fiscal reorganization.
