The Cardano Stablecoin Proposal, put forth by Cardano founder Charles Hoskinson, refers to the proposal to convert $100 million worth of ADA in the treasury into the Cardano-native supported stablecoin USDM. This proposal has multiple implications:

Enhancing ecosystem liquidity: Stablecoins are a vital foundation for the development of DeFi. The proposal aims to increase the liquidity of stablecoins within the Cardano network, which will help facilitate trading, market-making, and other activities within the ecosystem, increase the total locked value (TVL) of the network, and promote the development of decentralized finance.

Creating economic returns and capital circulation: The proposal includes a self-sustaining economic model, expected to achieve an annual return of 5%-10%. The returns will be used to purchase ADA from the open market and return it to the treasury, helping to reduce the circulating supply of ADA, expand the treasury size, provide ongoing support for the ecosystem, and create a positive cycle of capital.

Attracting investment institutions: If the proposal is implemented, it may attract large venture capital firms such as a16z or Pantera Capital to join the Cardano ecosystem, bringing more funds and resources to the ecosystem and promoting its further development and growth.

Enhancing competitiveness: Stablecoins are an important asset class in the blockchain field, with Ethereum leading in stablecoin TVL. By strengthening its stablecoin-related layout, Cardano can enhance its competitiveness in the DeFi field, better compete with other public chains, and attract more developers and users.