**Cardano Faces Heated Debate Over \$100M Treasury Proposal**
Cardano's community is currently embroiled in a major debate regarding a proposal to deploy 140 million ADA—roughly \$100 million at current prices—from its on-chain treasury to support the growth of native stablecoins and decentralized finance (DeFi) infrastructure.
The proposal, backed by Charles Hoskinson and analytics platform TapTools, aims to use the funds to enhance liquidity for stablecoins such as USDM and USDA. Supporters argue that boosting stablecoin liquidity will drive DeFi activity on Cardano, making it more competitive with Ethereum and Solana. They suggest the execution can be done through over-the-counter (OTC) deals or algorithmic time-weighted average price (TWAP) trades to minimize market disruption.
However, the proposal has sparked significant backlash. Critics warn that dumping such a large amount of ADA into the market could lead to a price collapse, with some estimating a potential dip below \$0.50 due to trader front-running and panic selling. Prominent community figures advocate for alternative methods, such as minting crypto-backed stablecoins, that would avoid selling ADA altogether.
The controversy has already had an impact on ADA's price, which dropped nearly 6% following the news. The community now awaits a governance vote that will determine whether the plan moves forward. The outcome could have lasting implications for Cardano’s DeFi ecosystem and investor confidence in treasury management.
CheckDot is SAFU research on CheckDot CDT.
