Cardano Founder Charles Hoskinson Clarifies Proposal to Create Multi-Asset Yield Fund

Hoskinson discussed his proposal to enhance Cardano’s liquidity and DeFi in an interview with David Gokhshtein.

Recently, he suggested converting about $100 million worth of ADA from the treasury into a mix of Cardano-native stablecoins and Bitcoin, aiming for yields up to 10%. These yields would be reinvested in ADA and added back to the treasury.

However, many market commentators criticized his approach. Critics, including Anthony Pompliano, have accused him of wanting to sell ADA for Bitcoin.

Hoskinson Defends His Proposal

In the interview, Hoskinson stressed the necessity of a multi-asset reserve. He noted that the Cardano ecosystem is the largest ADA holder, with 1.7 billion coins in its treasury.

He estimated the current value at $1 billion, down from an ATH of $5 billion, and claimed the treasury is currently unproductive.

> “The massive ADA just sits there like a dragon on a big pile of gold,” stated Hoskinson.

He proposed turning part of the idle ADA treasury into a multi-asset reserve to generate yield, which influenced his initial proposal.

Bitcoin Allocation

Hoskinson suggested dedicating 50% of the $100 million to Cardano-native stablecoins, potentially earning yields from lending and DeFi. The other half will go into Bitcoin, banking on its price appreciation in the future.

He believes this combined allocation will yield returns reinvested into ADA and benefit Cardano’s stablecoin and total value locked (TVL) metrics.

Cardano Lags Behind Competitors

Hoskinson pointed out that leading stablecoin issuers typically evaluate a network’s TVL and stablecoin availability before launching USDC tokens.

Currently, Cardano’s stablecoin supply is around $33 million, and its TVL stands at about $340 million, which puts its stablecoin-to-DeFi ratio at roughly 9.8%. In contrast, chains like Solana and Ethereum feature stablecoin supplies of around $11 billion and $190 billion, respectively.

Proposal Could Launch Soon

Hoskinson anticipates that Cardano’s DeFi landscape will invigorate after the treasury’s multi-asset proposal is active. He stated that the proposal could be prepared swiftly.

> JUST IN: Cardano $ADA founder Charles Hoskinson believes a multi-asset managed treasury proposal can be drafted quickly, potentially enabling blockchain partnerships with Bitcoin, XRP, and others.

Following this, the Cardano ecosystem team will turn to other projects, including collaborations with other networks like Bitcoin and XRP. Plans for XRP integration include Lace wallet enhancements and better yields for XRP holders.