Hoskinson Proposes $100 Million ADA to Bitcoin and Stablecoin Exchange to Boost Cardanos DeFi Landscape

The founder of Cardano, Charles Hoskinson, has proposed allocating $100 million from the project’s reserves in ADA tokens to purchase Bitcoin and stablecoins to boost the DeFi sector within the network.

«We could take $100 million in ADA from the treasury, convert it into a mix of stablecoins used in Cardano, such as USDM and USDA, and then exchange some of that for Bitcoin to initiate BTCFi,” he stated.

According to Hoskinson, this move aims to address the limited adoption of «stablecoins» within the blockchain ecosystem, which hinders competitiveness in the DeFi landscape.

He believes that tackling this issue will lead to generating «non-inflationary income» and will invigorate the decentralized finance economy.

As per DeFiLlama, the total market capitalization of stablecoins within the network stands at $31.6 million, compared to $124.4 billion for the leading Ethereum. Cardano ranks 46th among blockchains in this regard.

In total, approximately $278 million worth of DeFi assets are currently locked in the network, putting it at the 24th position. For comparison, Ethereum and Solana, which hold the top two spots, have total values locked (TVL) of $61.7 billion and $8.3 billion, respectively.

In the past 24 hours, the price of ADA has dropped by about 6%, while the overall cryptocurrency market cap has decreased by 5%. The Cardano token is trading around $0.6, approximately 60% lower than its all-time high recorded in September 2021. There are approximately 36.1 billion coins in circulation.

Some users have critiqued Hoskinson’s proposal to sell a substantial amount of ADA, fearing potential downward pressure on the asset’s price.

«We could convert 140 million ADA in a week or so without impacting the market through OTC and TWAP orders. This is a misleading narrative,» he responded to his critics.

He added that simply having confidence in «Cardano DeFi as a bullish trend» would create buying demand that could offset any large-scale liquidation.

«If $100 million could move the market, Cardano would have extreme volatility,» Hoskinson remarked.

In March, the CEO of the Cardano Foundation, Frederick Gregor, stated in an interview with CoinDesk that he does not view TVL as a significant metric for blockchain adoption.

Gregor, who leads the organization responsible for the ecosystem’s development, mentioned that his goal is to maintain a 50% level of non-financial activity within the network. He referred to certain «valueless transactions» in the context of Cardano’s «real-world use,» such as digital identity and metadata tracking.

The Cardano Foundation oversees the project in collaboration with Hoskinson’s IOG and Emurgo, both of which are commercial entities. Gregor acknowledged that this leads to some tensions among the different entities involved.

«The purpose of establishing a nonprofit organization was to optimize the decision-making process based on a ten-year horizon. This differs from optimizing management ‘for tomorrow,'» he clarified.

However, CoinDesk noted that users pointed out more serious disputes among the parties, describing them as a quarrel. Hoskinson partially agreed with this assessment.

It’s worth mentioning that the entrepreneur announced an audit of the Cardano Foundation’s treasury following allegations of misappropriating ADA worth $600 million.