Cardano Founder Proposes $100 Million Conversion to Boost DeFi Sector

Cardano founder Charles Hoskinson has proposed a significant initiative to bolster the network's decentralized finance (DeFi) sector and enhance its stablecoin ecosystem. The plan involves converting $100 million worth of ADA, Cardano's native token, into a mix of stablecoins and Bitcoin to boost the network's DeFi capabilities.

Hoskinson emphasized the urgency of this move, stating that the current stablecoin-to-total value locked (TVL) ratio on Cardano is detrimental to its growth. He aims to increase this ratio from the current 10% to between 30% and 40%. According to Hoskinson, the low stablecoin-to-TVL ratio is hindering Cardano's progress, and immediate action is necessary to address this issue.

The proposal includes converting the $100 million ADA into USDM and USDA stablecoins, as well as some Bitcoin, to create Prime Bitcoin DeFi. This strategic move is designed to inject new life into Cardano's DeFi sector and improve its competitive position in the market.

Critics have expressed concerns that converting such a large amount of ADA into other assets could negatively impact the token's price. However, Hoskinson has dismissed these worries, asserting that the treasury's conversion plan will be executed responsibly to avoid significant market disruptions. He also criticized skeptics, labeling them as inexperienced and unqualified to evaluate the strategy's feasibility.

If approved, this conversion could mark a pivotal shift in Cardano's strategy, positioning the network to better compete in the rapidly evolving DeFi and stablecoin sectors. The initiative underscores Cardano's commitment to enhancing its DeFi ecosystem and addressing the challenges it faces in this critical area of blockchain technology.