Key Takeaways:
Charles Hoskinson has put forth a proposal to convert $100 million of ADA into stablecoins and Bitcoin. This initiative aims to improve Cardano’s relatively low stablecoin-to-TVL (Total Value Locked) ratio compared to that of Ethereum and Solana. The concept also includes establishing a sovereign-style fund structure along with a governance board for better asset management.
The founder of Cardano and CEO of Input Output Global, Charles Hoskinson, recently unveiled his vision for reshaping the protocol’s treasury, suggesting the conversion of $100 million worth of ADA into stablecoins and Bitcoin. In a video released on June 13, Hoskinson highlighted that Cardano currently struggles with a stablecoin-to-TVL ratio that falls short of Ethereum and Solana, both of which surpass 100%. He believes that utilizing part of the treasury to enhance stablecoin liquidity could bolster Cardano’s DeFi ecosystem and encourage more users to participate.
Cardano Decentralized Sovereign Wealth Fund https://t.co/8RIELNl872
— Charles Hoskinson (@IOHK_Charles) June 13, 2025
Proposal for Treasury Diversification
Hoskinson indicated that the reallocated funds could be spread across various existing assets within the Cardano ecosystem, such as USDA, USDM, and IiUSD stablecoins, along with Bitcoin to facilitate the development of new DeFi products within the Bitcoin network. He reassured stakeholders that ADA does not face a liquidity issue, expressing confidence that the network’s daily trading volume would effectively accommodate the proposed sale through over-the-counter (OTC) and time-weighted average price (TWAP) transactions. Hoskinson dismissed fears that this transaction might negatively impact ADA’s price.
The concept of a sovereign-style fund for managing treasury assets was also introduced in the video. Hoskinson proposed that this approach could include the election of a governance board and collaborations with regulated Web3 asset managers to create yield and reinvest these proceeds back into the Cardano ecosystem.
He stressed the importance of preparing Cardano’s treasury to hold a diverse array of assets, especially with upcoming features like partner chains and support for native tokens. “As we’re reviewing the budget process, we should make some adjustments to the Constitution for more detailed treasury management concerning portfolio allocation,” he suggested.
Cardano’s Multi-Asset Treasury Governance Initiative
Ongoing discussions with DeFi projects and significant token holders aim to establish a formal proposal by the time of the Rare Evo conference later this year. “We also need to improve our voting system,” Hoskinson noted. “It’s time to implement some type of anonymous ballot for specific voting rounds, enabling smaller stakeholders to vote without fear of retaliation.”
Cardano joins a growing trend among several blockchain networks that are exploring treasury diversification through multi-asset reserves and off-chain yield generation strategies. This shift aligns with the principles of sovereign-style funds, in which asset conversion and reallocation are strategically managed to maintain financial stability over time.
Various DeFi ecosystems are now looking to implement formal governance structures for protocol funds. Proposals under consideration include the establishment of elected boards, third-party asset management, and cross-chain capital deployment, signaling a significant evolution in the way on-chain treasuries are managed and governed.
Frequently Asked Questions (FAQs)
How does Cardano’s treasury compare with other blockchain protocols in size and structure?
Cardano boasts one of the largest protocol treasuries in the cryptocurrency space, holding approximately 1.7 billion ADA. In contrast to some competitors, it currently lacks any yield strategy or multi-asset diversification, which this proposal aims to address.
What are the risks of converting ADA to stablecoins and BTC?
Potential risks encompass market exposure to external assets, execution slippage, and possible backlash from stakeholders concerned about moving away from an ADA-only portfolio. Regulatory considerations regarding stablecoins may also influence the strategy.
Could this proposal affect ADA’s on-chain governance or community voting power?
If treasury allocations transition to non-ADA assets and yield returns are reinvested differently, the governance weight linked to ADA holdings could diminish unless specifically accounted for in the design of the system.
What precedent exists for treasury investment in crypto ecosystems?
Projects like MakerDAO, Optimism, and Uniswap have started to explore treasury diversification through the utilization of real-world assets (RWAs), yield-generating stablecoins, and partnerships with asset managers, though the application varies significantly.
Why might Cardano prioritize Bitcoin DeFi integration?
Integrating BTC liquidity could attract new users, unlock dormant capital, and enhance stablecoin growth, particularly when combined with cross-chain yield strategies and institutional-grade custodial services.
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