Cardano (ADA) is at the center of a heated debate as the community weighs a proposal to reallocate 140 million ADA—valued at approximately $100 million—from the treasury into stablecoins and Bitcoin. The initiative, led by Charles Hoskinson and supported by TapTools, aims to boost liquidity for stablecoins such as USDM, USDA, and iUSD, with the goal of raising Cardano’s stablecoin-to-TVL ratio to levels seen in Ethereum and Solana ecosystems.
The strategy is designed to stimulate Cardano’s underdeveloped DeFi sector by providing deeper liquidity and potentially generating returns for the treasury. Hoskinson has emphasized a careful rollout over 30 to 90 days using OTC deals or algorithmic trades to reduce the risk of market disruption. Part of the plan includes using generated yields for ADA buybacks, positioning the treasury as a long-term, yield-generating vehicle.
However, the proposal has sparked concerns among community members who fear that selling such a large amount of ADA could trigger a price collapse. Influential voices have warned of potential front-running by traders and a drop in ADA’s price toward $0.50. Alternatives, such as crypto-collateralized stablecoins that avoid selling ADA, have been suggested.
Following the announcement, ADA dropped roughly 6%, falling from $0.688 to $0.625 before recovering slightly. The market remains volatile as the community awaits a governance vote on the proposal, which could significantly influence both Cardano’s price and the future of its DeFi ecosystem.
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