Hoskinson's plan could bring several potential benefits to the Cardano ecosystem but also carries certain risks. Let's analyze the pros, cons, and possible consequences.
Advantages of the plan:
1. Asset diversification
- Currently, the Cardano treasury consists mainly of ADA, creating high volatility and dependence on a single cryptocurrency.
- Converting part of the funds into stablecoins (USDT, USDC, DAI) will reduce the risk of ADA price collapse.
- Investing in Bitcoin will add stability, as BTC is considered less volatile than altcoins.
2. Creation of long-term income
- If part of the funds is invested in DeFi (e.g., stablecoin staking or providing liquidity), it could generate passive income.
- Revenues can be reinvested in purchasing ADA from the market, which will support the coin's price.
3. Sovereign wealth fund for Cardano
- Similar to national wealth funds (e.g., Norway's oil fund), such a reserve could provide stability and fund the development of the ecosystem.
- Cardano will have a "financial cushion" for grants, hackathons, marketing, and other initiatives.
4. Support for BTC/DeFi ecosystem
- Integration with Bitcoin (e.g., through wrapped BTC in DeFi) could attract new users and liquidity to the Cardano ecosystem.
Risks and issues:
1. Volatility of the cryptocurrency market
- Even Bitcoin and stablecoins are not immune to risks (e.g., USDC lost its peg during the banking crisis in 2023).
2. Centralization of fund management
- Who will make decisions about fund allocation? A clear voting mechanism is needed to avoid abuses.
3. Pressure on the ADA price
- Selling 100 million ADA on the market to convert to other assets could crash the price if not done gradually.
4. Regulatory risks
- In some jurisdictions, stablecoins and DeFi are under close scrutiny from regulators.
Conclusion:
The plan makes sense if:
✅ Implement it gradually to avoid crashing the ADA market. Essentially, as Hoskinson suggested.
✅ Create a transparent fund management mechanism (DAO, ADA holder voting).
✅ Diversify investments (not only BTC and stablecoins but also possibly traditional assets).
If done correctly, this will strengthen Cardano's financial stability and create additional value for ADA holders. However, if implemented carelessly, it could lead to short-term price drops and community distrust.
