#CardanoDebate

#CardanoDebate The current debate surrounding Cardano centers on a proposal to allocate $100 million worth of ADA from the treasury to boost stablecoin liquidity and enhance DeFi growth. Charles Hoskinson, Cardano's co-founder, argues that this move will address the network's limited stablecoin supply, foster long-term adoption, and create non-inflationary revenue for the treasury.

*Key Points of the Proposal:*

- *Diversification Strategy*: Convert $100 million worth of ADA into Bitcoin and Cardano-based stablecoins like USDM and USDA.

- *Stablecoin-to-TVL Ratio*: Target a 33% to 40% ratio to resolve Cardano's liquidity imbalance, currently at 9%.

- *Execution Plan*: Gradual conversion via OTC deals or algorithmic strategies like TWAP to minimize market impact.¹

*Community Concerns:*

- *Sell Pressure*: Critics warn that announcing a large ADA sale could tank prices or push the value down to $0.50 if traders front-run the move.

- *Alternative Solutions*: Some suggest minting crypto-backed stablecoins like ObyUSD to preserve market stability.

*Market Impact:*

- *ADA Price Drop*: Cardano's ADA token dropped 6% amid macro pressure and debate over the $100 million DeFi stimulus plan.

- *Resistance Level*: ADA faces resistance at $0.645, with a rising channel forming and potential for accumulation.²