Cardano founder Charles Hoskinson has announced a proposal to swap $100 million worth of ADA tokens for Bitcoin and Cardano-native stablecoins. This strategic move aims to resolve the platform’s significant stablecoin liquidity gap, where stablecoins currently represent only 10% of Cardano’s total value locked (TVL) in decentralized finance (DeFi) applications.
The swap intends to generate non-inflationary revenue for Cardano’s treasury while enhancing overall ecosystem liquidity, usability, and appeal. By strengthening stablecoin reserves, Cardano seeks to improve its competitive positioning against leading DeFi networks like Ethereum and Solana.
Community reactions remain divided, with supporters endorsing the liquidity injection and critics expressing concerns about long-term sustainability and regulatory compliance. The proposal emerges amid market challenges for ADA, which currently trades at $0.64 with a $22.56 billion market capitalization after experiencing a 19.36% monthly decline.
If approved, the initiative could attract more DeFi projects and users to Cardano but faces regulatory headwinds regarding stablecoin oversight. The outcome may significantly influence Cardano’s ability to capture greater market share in the evolving DeFi landscape.