Cardano co-founder Charles Hoskinson has suggested converting approximately $100 million worth of ADA tokens from Cardano's treasury into a combination of bitcoin (BTC) and stablecoins such as USDM and USDA, which are native to Cardano. This plan aims to increase the ratio of stablecoin issuance to total value locked (TVL) in the Cardano DeFi ecosystem from the current 10% to around 30-40%.
Hoskinson acknowledged critics' concerns about a possible negative impact on ADA’s price but labeled these worries as "inexperienced," asserting that the conversion could be done via over-the-counter (OTC) sales and time-weighted average price (TWAP) mechanisms to avoid market disruption.
The current TVL on Cardano stands at approximately $356 million, with stablecoins accounting for only about $31 million, highlighting the limited stablecoin liquidity that Hoskinson said is "killing Cardano." In comparison, competitor platforms like Solana exhibit much higher TVL and stablecoin minting figures.
By increasing stablecoin liquidity, Hoskinson believes the plan would generate non-inflationary revenue for Cardano’s treasury and stimulate the growth of its DeFi economy. However, some community members have expressed concern that the large ADA conversion could add selling pressure amid the token’s recent price drop (7.58%), potentially exacerbating downward price trends during a weak broader market.
Critics have proposed alternatives, such as minting crypto-backed stablecoins using ADA and deploying them in liquidity pools without triggering sell-side pressure. Additionally, Cardano recently gained institutional recognition by being included in Nasdaq’s revamped Crypto US Settlement Price Index, yet it faces ongoing challenges in expanding its DeFi ecosystem.