Cardano’s Bold Move to diversify Treasury
Cardano’s founder, Charles Hoskinson, has unveiled a plan to diversify the network’s treasury. The goal? To bolster the decentralized finance (defi) and stablecoin ecosystem.
Cardano’s Treasury Diversification Plan Gains Traction
cardano’s co-founder, Charles Hoskinson, has proposed a significant shift in the network’s treasury composition. The plan involves converting $100 million worth of Cardano (ADA) tokens into Bitcoin (BTC) and native stablecoins, USDM and USDA. This move aims to address the imbalance between the network’s total value locked (TVL) and its stablecoin reserves.
Currently, Cardano holds $1.5 billion in ADA,but only $30 million in stablecoins. Hoskinson sees this as a major hurdle for the network’s DeFi ambitions. He believes diversifying the treasury will unlock liquidity and attract institutional investors. Drawing parallels with sovereign wealth funds, Hoskinson argues that this strategic move will signal confidence in Cardano’s future.
The plan targets a stablecoin-to-TVL ratio of 33% to 40%, aiming to boost reserves and support Bitcoin-focused DeFi. Hoskinson also hopes this will lead to better listings for Cardano-native stablecoins on various exchanges.
Some traders worry about the impact on ADA’s price. Though, Hoskinson is confident that the network’s liquidity can handle this without significant price fluctuations. He assures that the conversion will be managed carefully, using tools like time-weighted average price algorithms.
Whether this bold move transforms Cardano into a DeFi powerhouse or faces challenges depends on timing and market sentiment. For now, Hoskinson’s proposal has sparked discussions about the future of Cardano’s financial ecosystem.
