CardanoDebate

Analysis: Hoskinson's Controversial Proposal for the Cardano (ADA) Treasury

The founder of Cardano, Charles Hoskinson, has sparked debate by suggesting using 140 million ADA (≈$100M) from the project's treasury to buy BTC and native stablecoins (USDM, USDA, IUSD) in order to boost the DeFi ecosystem. The market reaction was immediate: ADA fell by 6%, reflecting the divide in the community.

Pros and Cons of the Proposal

In favor:

- Strengthening DeFi in Cardano: Reserves in BTC and stablecoins could attract more liquidity and projects.

- Strategic diversification: Reduces exclusive dependence on ADA and mitigates volatility risks.

- Sign of maturity: Shows willingness to innovate in treasury management.

Against:

- Risk of centralization: Who will control these reserves? Concerns about transparent governance.

- Massive sell-off of ADA: The market could interpret it as a lack of confidence in the asset itself.

- Market conditions: BTC and stablecoins also face macroeconomic pressures.

Impact on ADA Price

- Short term: Volatility due to uncertainty and possible sales by disgruntled holders.

- Long term: If the strategy attracts more adoption, it could revalue ADA.