$BTC Cardano Stablecoin Proposal

Recently, Cardano founder Charles Hoskinson proposed a highly anticipated initiative 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 the Cardano decentralized finance (DeFi) ecosystem.

Hoskinson pointed out that the current market capitalization of stablecoins on the Cardano network accounts for less than 10% of its total value locked (TVL) in DeFi, far below that of competitors like Ethereum and Solana. He suggested converting 140 million ADA (approximately $100 million) in the treasury into Cardano's fiat-backed stablecoin USDM to enhance liquidity and stimulate ecosystem growth. Furthermore, he plans to allocate a portion of the funds to 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) transactions and time-weighted average price (TWAP) strategies, the proposal has sparked widespread discussion within the community. Some critics are concerned that large-scale ADA selling could lead to further price declines. However, Hoskinson believes this initiative will create non-inflationary income for the treasury and help build Cardano's DeFi economy.

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