The Cardano community is voting on a bold proposal to inject $41 million of liquidity into the blockchain’s DeFi ecosystem, marking one of the largest attempts to strengthen its stablecoin market.
The plan suggests creating a dedicated fund seeded with 50 million ADA, equivalent to roughly $41 million, combined with fiat-backed stablecoins. According to the proposal, 90% of these funds would be allocated to decentralized exchanges (DEXs) and lending protocols to enhance liquidity across Cardano’s growing DeFi ecosystem, currently valued at $353 million.
“There is a critical need for deeper stablecoin liquidity within Cardano,” the proposal notes. “Bootstrapping this liquidity from the Cardano treasury will benefit the entire community.”
How It Works
To support stablecoin integration, the proposal outlines converting $27 million of ADA into fiat-backed stablecoins. The remaining ADA will be retained as the network’s native asset, pairing with stablecoins on DEXs. Importantly, the proposal emphasizes that these conversions won’t occur on open markets, but via over-the-counter transactions, minimizing any potential negative impact on ADA’s price.
Additionally, 15% of revenue generated by DeFi protocols from the fund would be converted back into ADA and returned to the treasury, creating a recycling mechanism to sustain ecosystem growth.
Context and Market Trends
Cardano’s DeFi sector is still modest compared to Ethereum and Solana, and its founder, Charles Hoskinson, has criticized the slow adoption of stablecoins on the network. However, interest in stablecoins is surging globally; investment into stablecoin startups has grown fivefold compared to 2024, with forecasts projecting the market could exceed $1 trillion by 2028.
If approved, this proposal would represent a significant strategic push to position Cardano as a competitive player in the decentralized finance space, leveraging treasury-backed funding to drive adoption and liquidity.
