Cardano Chief Proposes Bitcoin and Stablecoin Treasury Reallocation to Strengthen DeFi

Cardano co-founder Charles Hoskinson has unveiled a strategic proposal to bolster the blockchain’s decentralized finance ecosystem through a deliberate rebalancing of the project’s treasury assets. The plan involves converting $100 million worth of ADA tokens into a diversified mix of bitcoin and native stablecoins, signaling a shift toward a more robust DeFi infrastructure. This move comes as Cardano seeks to enhance its competitive positioning amid growing dominance from rival Layer 1 blockchains.

Strategic Shift: Why Cardano Needs More Bitcoin and Stablecoins

Hoskinson’s proposal centers on allocating treasury funds into bitcoin and Cardano-native stablecoins such as USDM and USDA to accelerate ecosystem development. According to his explanation during a recent public discussion, this capital redeployment aims to prime bitcoin DeFi activity on Cardano while simultaneously expanding stablecoin liquidity. The underlying logic reflects a recognition that stablecoin availability and total value locked (TVL) ratios play a crucial role in attracting users and enabling seamless cross-chain opportunities.

Currently, Cardano’s stablecoin-to-TVL ratio stands at approximately 10%, with just $31 million in minted stablecoins relative to $356 million in total value locked on-chain. Hoskinson’s target is to elevate this ratio to between 30% to 40%, a threshold he believes is essential for creating a vibrant DeFi environment that can support genuine economic activity.

The Liquidity Question: Comparing Cardano to Solana’s DeFi Dominance

When critics raised concerns about potential market impact from divesting $100 million in ADA, Hoskinson dismissed such worries, characterizing them as coming from “inexperienced” observers. He emphasized that ADA possesses sufficient liquidity to absorb such a transaction without causing price volatility, asserting the move would proceed without friction.

The competitive landscape underscores the urgency of Hoskinson’s initiative. Solana, by contrast, has cultivated a thriving DeFi ecosystem with $9.8 billion in TVL and $11 billion worth of stablecoins actively circulating on-chain. This disparity illustrates why Cardano’s stablecoin infrastructure remains, in Hoskinson’s words, a critical bottleneck “killing Cardano’s” growth potential. The proposed allocation seeks to generate what he terms “non-inflationary revenue” while building sustainable DeFi momentum.

Leadership Divided: Different Visions on Measuring Cardano’s Success

Interestingly, Hoskinson’s emphasis on TVL and stablecoin ratios stands in contrast to the perspective held by Cardano Foundation CEO Frederik Gregaard. In recent statements, Gregaard suggested that TVL metrics hold limited relevance for evaluating adoption success, presenting a philosophical disagreement about how to measure the blockchain’s progress and health. This divergence highlights ongoing internal debates within the Cardano community about prioritization and strategic direction.

Despite these differing viewpoints on measurement frameworks, both leaders share the overarching goal of strengthening Cardano’s position in the competitive blockchain landscape. The treasury reallocation proposal represents one potential avenue toward that objective, whether or not all stakeholders agree on the metrics that define success.