#Cardano founder Charles Hoskinson clarifies his proposal to convert a portion of ADA’s on-chain treasury into a multi-asset yield-generating fund.
Hoskinson was recently interviewed by media personality David Gokhshtein to discuss his proposal to boost Cardano’s liquidity and DeFi ecosystem.
Recall that Hoskinson floated a plan to convert approximately $100 million worth of ADA from the treasury into a mix of Cardano-native stablecoins and Bitcoin to earn a yield of up to 10%. He suggested that the yields would be reinvested in ADA and deposited into the treasury.
However, several market commentators criticized his proposal. Some critics, like Anthony Pompliano, suggested that the Cardano founder intends to dump ADA for Bitcoin.
Hoskinson Defends His Proposal
During his recent interview, Hoskinson emphasized the importance of a multi-asset reserve. He mentioned that the Cardano ecosystem remains the largest holder of ADA, with 1.7 billion coins currently in its treasury.
The Cardano founder estimated the current value at $1 billion, noting that it had previously reached an ATH of $5 billion. However, he claims the treasury is currently sitting idle without earning anything in return.
“[The massive ADA] just sits there like a dragon on a big pile of gold,” Hoskinson remarked.
He believes converting a portion of this idle ADA treasury into a multi-asset reserve would generate more yield. This influenced his proposal to convert $100 million worth of ADA into a mix of Cardano-native stablecoins and Bitcoin.
Bitcoin Allocation
Hoskinson proposed allocating 50% of the $100 million to Cardano-native stablecoins, potentially earning yields through lending and other DeFi activities. The remaining half, representing $50 million, will go into Bitcoin, hoping its price will appreciate in the future.
He emphasized that combining these allocations will enable Cardano to earn yields, which will be reinvested in ADA and deposited into treasury. In his view, this strategy would help to boost Cardano’s stablecoin and TVL metrics.
