In response to the growing criticism of the proposal to convert ADA from Cardano's treasury into stablecoins, Charles Hoskinson has responded. In a post on X, the founder of Cardano warned that the network faces serious risks from inaction, while rival blockchains take advantage of unfair advantages to get ahead.
Hoskinson argues that other blockchains rely on venture capital and media influence to stay ahead. Armed with large financial resources, these networks can attract Cardano developers and decentralized applications (dApps).
"We are not in a static game with a guaranteed seat at the table," Hoskinson said. "We are in an ocean of sharks trying to eat us every day."
Last week, Hoskinson identified Cardano's biggest weakness, pointing out its lack of liquidity in stablecoins. Currently, the market capitalization of Cardano's stablecoins compared to the total value locked (TVL) in DeFi is just 9.65%. In contrast, Ethereum and Solana have ratios of 195% and 125%, respectively.
He points out that the total value of all stablecoins issued on Cardano is just 33 million dollars. This limited liquidity hampers the growth of DeFi, leading Hoskinson to urge the community to take action to address the issue.
"We have to decide if we want to win, if we really want to have a billion users and have Cardano in every home," Hoskinson said.
Hoskinson has proposed a quick solution to the stablecoin issue: convert 100 million dollars into ADA to the native Cardano stablecoin. He particularly pushes for the conversion of ADA to USDM, which, he claims, will fill a significant gap in the Cardano ecosystem.
However, the proposal has drawn criticism, with the loudest voices claiming that an ADA sale will trigger a price drop. They argue that a prolonged bear market, combined with a massive sale of ADA tokens, could lead to a sharp price decline.
Hoskinson replied that the sale would not significantly affect prices due to the deep market liquidity. He suggests using over-the-counter (OTC) operations spread over a week to mitigate potential selling pressure.
"Growing is hard, but that's how we find ourselves as an ecosystem," Hoskinson said. "It's tough love, but I would be doing you a disservice if I didn't say it."
Amid the uproar over the stablecoin fiasco, Hoskinson hints at an integration of XRP into Cardano. He confirmed that a comprehensive XRP package is being worked on, but did not share information regarding the timeline for the integration.
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