Cardano has proposed to swap $100 million worth of ADA into USDM, a stablecoin
Going Giga on Cardano: Hoskinson's Bold Plan to Supercharge ADA's Liquidity
Charles Hoskinson, Cardano's foundational figure, stirred the crypto world with his audacious pitch - converting 100 million smackers' worth of ADA from the treasury to the local stable crypto, USDM.
Hoskinson mulled over the potential of this move, projecting a smashing annual yield of around 5 to 10 million bones, generating a kick-ass liquidity supply for the Cardano ecosystem. With the current sequestered ADA funds idling, Hoskinskin reckoned this cunning strategy could propel DeFi applications and whack up Cardano's transaction volume like never before.
Treasury Metamorphosis: ADA to USDM, Boosting Liquidity
Cardano boasts a whopping 1.7 billion ADA, making its treasury worth a cool 650 million bucks. Hoskinson envisions this wealth, fortified by financial infrastructure and transformed into USDM, could catapult growth and stimulate trading, market making, and locked value, as well as other pivotal metrics.
Hoskinson clarified the process in simple terms: ADA converts into USDM, earning passive income, which in turn is used to secure more ADA, strengthening the treasury. This magic trick supercharges stablecoin liquidity and entices DeFi activities.
As USDM is fully on-chain and backed 1:1 by greenbacks, Hoskinson saw ample potential for Ethereum and Solana-like liquidity models to be adapted on Cardano.
Squandered Opportunities and Lackluster Community
Hoskinson wasted no time assailing the Cardano community for their mediocre activity, condemning the Intersect management apparatus, designated to manage the treasury and proposals, for underutilization. He castigated the old-fashioned approach to large stablecoins like USDC being selectively integrated into the Cardano network, highlighting it as a colossal strategic blunder.
Hoskinson also proposed that venture capital firms might step in to create income and replenish the treasury.
Cardano’s Privacy-Focused Stablecoin and Open Development Process in Focus
In a recent chat with leaders, Hoskinson dropped a bombshell - Cardano's mega plan to develop a privacy-focused stablecoin, aiming to outshine the competition and set a new industry standard.
However, the crypto realm is wary of privacy-focused digital assets as they're burdened with a bad reputation for potential misuse. The European Union schemes to scrap these assets from exchanges by 2027. In response, Hoskinson contends that offering privacy while staying in the regulator's good books can be achieved through selective transparency.
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By converting ADA from the Cardano treasury to USDM, Hoskinson aims to strengthen liquidity, accelerate DeFi growth, and supercharge the ecosystem, addressing the current shortage of liquidity and under-utilized treasury resources.
If executed, the proposed move could improve DeFi participation and make the ecosystem more competitive with other blockchains. A summary of the proposed benefits includes:
- Increased Stablecoin Supply: Ample stablecoins for DeFi use, easing liquidity shortages.
- Enhanced DeFi Participation: Attracting users and developers, offering a breadth of financial products.
- Treasury Diversification: Reduced ADA volatility and a strategic reserve of stable assets.
- Minimal Market Impact: Gradual conversion and market depth maintain ADA's market stability.
Investing in Liquidity:Harnessing the transformative power of technology, Hoskinson plans to invest a significant portion of the Cardano treasury's ADA into USDM, a move expected to bolster liquidity, propel DeFi growth, and fortify the ecosystem against future volatility.
Embracing Innovation Through Technology:With USDM being fully on-chain and backed 1:1 by fiat currency, Hoskinson envisions this novel investment could pave the way for the implementation of Ethereum and Solana-like liquidity models, boosting Cardano's ability to accommodate a diverse range of DeFi activities and positioning it as a competitive player in the ever-evolving world of blockchain.
