#CardanoDebate

The Cardano debate centers around a proposal by Charles Hoskinson to convert 140 million ADA from the treasury into USDM, a fiat-backed stablecoin, to boost Cardano's DeFi liquidity. This move aims to bridge the liquidity gap in Cardano's DeFi ecosystem and generate non-inflationary income for the treasury.

*Key Points:*

- *Proposal Details*: The plan involves converting $100 million worth of ADA into USDM to improve stablecoin liquidity, potentially attracting institutional capital and boosting DeFi growth.

- *Community Concerns*: Critics warn that announcing a large ADA sale could tank prices, possibly pushing the value down to $0.50 if traders front-run the move.

- *Alternative Solutions*: Some community members suggest minting crypto-backed stablecoins like ObyUSD to preserve market stability, rather than converting ADA to USDM.

- *Market Impact*: ADA's price dropped 6% amid the debate, with some attributing the decline to macro market weakness and others to the proposal itself.

*Arguments For and Against the Proposal:*

- *Proponents*: Believe the move will strategically push DeFi growth, create long-term revenue, and address Cardano's stablecoin shortage.

- *Critics*: Argue that the plan could trigger heavy sell pressure, exacerbating ADA's recent price decline ¹ ².