#CardanoDebate Cardano Community Divided Over $100M Treasury Allocation Proposal

A major controversy is unfolding within the Cardano community over a proposal to allocate 140 million ADA—equivalent to around $100 million at current prices—from the blockchain’s on-chain treasury. The funds would be used to support the development of native stablecoins and decentralized finance (DeFi) infrastructure.

The proposal, championed by Cardano founder Charles Hoskinson and analytics firm TapTools, aims to boost liquidity for stablecoins like USDM and USDA. Proponents believe this move will significantly enhance Cardano’s DeFi capabilities, making it a stronger competitor to platforms like Ethereum and Solana. They propose executing the fund deployment through over-the-counter (OTC) transactions or algorithmic time-weighted average price (TWAP) strategies to reduce market impact.

However, the plan has met strong opposition. Critics fear that releasing such a large volume of ADA into the market could trigger a sharp price decline, potentially pushing it below $0.50. Concerns center around front-running by traders and mass sell-offs. Some well-known community members are advocating for alternative approaches—such as issuing crypto-collateralized stablecoins—that avoid liquidating ADA altogether.

The debate has already rattled market sentiment, with ADA's price falling nearly 6% following the announcement. The proposal is now headed to a governance vote, the results of which could shape the future of Cardano’s DeFi ecosystem and influence investor trust in how treasury assets are managed.

CheckDot is conducting a SAFU (Secure Asset Fund for Users) review on CheckDot CDT.