$BTC Cardano Stablecoin Proposal

Recently, Cardano founder Charles Hoskinson proposed a highly anticipated proposal to convert $100 million worth of ADA in the Cardano treasury into stablecoins and Bitcoin. The proposal aims to address the issue of insufficient stablecoin liquidity in Cardano's decentralized finance (DeFi) ecosystem.

Hoskinson noted that the current market value of stablecoins on the Cardano network accounts for less than 10% of its total value locked (TVL) in DeFi, far below its competitors Ethereum and Solana. He suggested converting 140 million ADA (approximately $100 million) from the treasury into Cardano's fiat-backed stablecoin USDM to boost liquidity and stimulate ecosystem growth. Additionally, he plans to allocate part of the funds into Bitcoin to promote Bitcoin DeFi activities.

Although Hoskinson emphasized that this conversion could be completed without significantly impacting market prices through over-the-counter (OTC) and time-weighted average price (TWAP) strategies, the proposal has sparked widespread discussion within the community. Some critics are concerned that a large-scale ADA sell-off could lead to further price declines. However, Hoskinson believes that this move will generate non-inflationary income for the treasury and help establish Cardano's DeFi economy.

The proposal also involves establishing a decentralized Cardano sovereign wealth fund, similar to investment models in countries like Norway, to prepare for future returns through investments in assets like stablecoins and Bitcoin. If the proposal is approved, it will mark a significant step for Cardano in enhancing its DeFi ecosystem and attracting institutional investors.