#CardanoDebate CardanoDebate

#CardanoDebate #Cardano_Debate: The ongoing debate surrounding Cardano revolves around a proposal to allocate 100 million USD from the ADA treasury to enhance stablecoin liquidity and drive decentralized finance growth. Charles Hoskinson, co-founder of Cardano, believes this move will address the limited supply of stablecoins on the network, promote its long-term adoption, and create non-inflationary revenue for the treasury.

*Key Points of the Proposal:*

- *Diversification Strategy*: Convert 100 million USD of ADA into stablecoins based on Bitcoin and Cardano such as USDM and USDA.

- *Stablecoin to Total Asset Value Ratio*: We are targeting a ratio between 33% and 40% to address Cardano's liquidity imbalance, which currently stands at 9%.

- *Implementation Plan*: Gradual conversion through over-the-counter trades or algorithmic strategies like TWAP to minimize market impact.¹

*Community Concerns:*

- *Sell Pressure*: Critics warn that news of a large ADA sale could lead to price drops or reduce its value to $0.50 if traders anticipate this move.

- *Alternative Solutions*: Some suggest minting cryptocurrency-backed stablecoins like ObyUSD to maintain market stability.

*Market Impact:*

- *ADA Price Drop*: Cardano's ADA token has decreased by 6% amid economic pressures and discussions of a $100 million decentralized finance stimulus plan.