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Cardano allocates 100 million ADA for stablecoins and DeFi growth

Charles Hoskinson, founder of Cardano, proposes in a YouTube video to convert 100 million ADA (about 6% of reserves) into stablecoins like USDM, iUSD, or USDA.

By Mike Hesp
• 3 min read
Cardano allocates 100 million ADA for stablecoins and DeFi growth

Charles Hoskinson, founder of Cardano, proposes in a YouTube video to convert 100 million ADA (about 6% of reserves) into stablecoins like USDM, iUSD, or USDA. With this, he aims to strengthen Cardano's DeFi network and achieve an annual yield of 5 to 10% through lending. The profits would then be used to buy back ADA, growing the reserves.

He calls this plan a kind of “state fund” for Cardano. The goal is to increase the network's value in the long term. In addition to ADA and stablecoins, he also wants to hold Bitcoin, aiming for a fund of $1 billion.

The purchases of stablecoins should be done cautiously through special trading methods to avoid big price swings. Hoskinson expects the market impact to be small (less than 0.5% slippage).

Cardano also wants to be the first Layer-1 blockchain to have a regulated, private stablecoin that complies with KYC and anti-money-laundering rules. According to Hoskinson, the reserve capital is currently idle and Cardano is missing opportunities in DeFi and tokenizing real-world assets.

Other networks like Ethereum, Solana, and Avalanche are already much further ahead. Tech giants like Apple, Meta, and Google are also entering stablecoins. Cardano, according to Hoskinson, must move quickly to stay in the game.

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