Charles Hoskinson Proposes $100 Million ADA Allocation to Boost Cardano’s DeFi Ecosystem
Charles Hoskinson, the co-founder of Cardano, has put forward an ambitious plan to allocate $100 million (approximately AU$153 million) in ADA from the project’s treasury. The goal is to enhance Cardano’s decentralised finance (DeFi) ecosystem and its stablecoin offerings. This strategy involves using treasury assets to invest in Bitcoin (BTC) and Cardano’s own native stablecoins, including USDM, USDA, and iUSD.
In a recent live stream, Hoskinson revealed that the proposal is under active consideration by Cardano Foundation leaders, including Dan Singleman, the Chief Investment Officer of the Hoskinson Family Office. He articulated that the move is a strategic response to Cardano’s lacklustre performance in the stablecoin market, which he claims is significantly hindering the network’s competitiveness.
He remarked, “What is killing Cardano is our stablecoin situation. This would start to solve it. Generate some non-inflationary revenue for the treasury, and help build up our DeFi economy.”
The initiative aims to provide a dual advantage: generating sustainable revenue without inflation and revitalising a stagnant DeFi environment.
Community Concerns and Price Impact
Despite the potential benefits, the proposal has raised concerns within the Cardano community regarding the possible downward pressure on ADA’s price resulting from the large-scale sale of tokens. Critics worry that unloading $100 million worth of ADA on the open market could negatively impact its value significantly.
However, Hoskinson assured detractors by claiming that the market could handle this volume without any adverse price movements. He stated, “$100 million in ADA can be placed on the market within 90 days with no movement of the price.” He further emphasised the depth of the market by noting that billions of dollars in ADA are traded weekly worldwide. His assertion is that confidence in the Cardano DeFi sector would generate sufficient buying demand to offset any liquidation concerns at this scale.
“The markets are deep. If $100 million could move the market, Cardano would have extreme volatility,” he clarified.
To ensure the plan’s success, the next step, according to Hoskinson, will involve collaborating with major DeFi projects within the ecosystem to evaluate the proposal’s feasibility and readiness for execution.
At the time of writing, ADA is trading at around $0.6 (AU$0.92), reflecting a decline of approximately 16.9% over the past month, as indicated by data from CoinGecko.
This bold proposal by Hoskinson illustrates a committed effort to enhance Cardano’s standing in the competitive cryptocurrency landscape, particularly in the realm of decentralised finance and stablecoin utilisation.
