Public Chain Cardano Founder Hoskinson Proposes to Use Approximately $100 Million in ADA to Exchange for Bitcoin and Stablecoins, Injecting Liquidity into DeFi, Sparking Heated Discussions in the Community.
(Background: ADA founder criticizes Ethereum’s “three major shortcomings”: Vitalik admits Cardano is better, ETH may disappear within ten years)
(Supplementary Background: Cardano founder: Bitcoin will dominate decentralized finance in three years, ADA surged 190% in a single month)
Proposal Overview
On June 13, Cardano founder Charles Hoskinson proposed during a live broadcast to exchange approximately $100 million in ADA from the treasury into stablecoins and Bitcoin, in order to rapidly amplify on-chain liquidity and address the liquidity shortage in DeFi. If approved, Cardano will become the first public chain to manage its native tokens using a “sovereign fund” approach.
Capital Allocation and Goals
Hoskinson suggested converting 70% to 80% of ADA into stablecoins such as USDM, USDA, and iUSD, while using the remaining 20% to 30% to purchase Bitcoin. He emphasized that Cardano’s existing liquidity can absorb the $100 million sell-off without causing significant impact on ADA’s price, stating, “The lack of stablecoins is stifling Cardano.” Hoskinson plans to establish a fund pool, overseen by a governance committee and subject to on-chain audits, creating a decentralized version akin to the “Norwegian and Abu Dhabi” sovereign funds.
Current Metrics
However, according to DefiLlama data, Cardano’s Total Value Locked (TVL) is only $356 million as of mid-2025, with an on-chain stablecoin market capitalization of $31 million, representing about 10% of the TVL. In comparison, Solana’s ratio is around 110%, and Ethereum’s reaches 190%, highlighting the challenges Cardano faces in attracting capital and developers.
Community Divisions and Governance Design
It is worth noting that Frederik Gregaard, CEO of the Cardano Foundation, has publicly stated:
“TVL is not a key indicator of ecological success.”
This statement contrasts with Hoskinson’s urgent attitude towards increasing TVL, raising concerns within the community regarding strategic unity. Critics worry that a large-scale ADA sell-off might still drag down the coin’s price, and that centralized decision-making contradicts the spirit of decentralization. Supporters argue that by first increasing stablecoins and liquidity, and then reinvesting the profits, a sustainable financial cycle can be established.
Potential Impacts and Unknowns
If the proposal is implemented, ADA may experience psychological selling pressure in the short term, but the supply of on-chain stablecoins and the activity level in DeFi are expected to rise quickly, paving the way for the next market cycle. In the face of fierce competition from mainstream public chains, whether Cardano can fill in the DeFi puzzle with this high-risk, high-reward experiment remains to be seen.
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