A new debate has ignited within the Cardano community – and it’s all about stablecoins, treasury funds, and the potential impact of a massive ADA conversion. TheCryptoBasic shared details about this via thread on their X account.
Cardano founder Charles Hoskinson proposed converting 140 million ADA, worth roughly $100 million, from the network’s treasury into USDM, a Cardano-native stablecoin. The goal? To boost stablecoin liquidity in Cardano’s DeFi ecosystem and jumpstart broader growth.
Hoskinson presented the idea during a recent AMA, suggesting the move could be carried out via OTC deals and TWAP strategies, which would prevent any major price disruption. With the Cardano treasury holding over 1.7 billion ADA (currently valued at about $1.23 billion), the proposed amount represents a small fraction – but the dollar value is still significant enough to stir concerns.
And stir it did.
#Cardano Founder Says $100M $ADA Conversion to Stablecoin Won’t Impact Price. 🧵🧵🧵 pic.twitter.com/4q4w83R4tT
— TheCryptoBasic (@thecryptobasic) June 13, 2025
Not everyone welcomed the plan. One of the most vocal critics was a Decentralized Representative (DRep) known as Whale, who posted his concerns on X. He acknowledged that stablecoin liquidity is a problem for Cardano, but warned that injecting $100 million worth of ADA into the market – especially under current conditions – could create dangerous sell pressure. Whale argued that such a large move, even if intended to help DeFi grow, could backfire by triggering front-running and further price instability. Instead, he proposed minting crypto-backed stablecoins, like ObyUSD, as a way to achieve liquidity without dumping ADA into the open market.
Hoskinson, however, pushed back hard. He dismissed the concern that the conversion would crash ADA’s price. According to him, ADA sees billions in weekly trading volume, and with smart execution through OTC channels and time-weighted pricing, the market can absorb the conversion without blinking.
He also pointed to a bigger problem that justifies the move – Cardano’s low stablecoin TVL ratio. Right now, Cardano’s stablecoin market cap compared to total value locked (TVL) is just 9.65%. By contrast, Ethereum sits at 195.3% and Solana at 127.4%. Hoskinson says this shows that Cardano is badly lagging when it comes to stablecoin utility – and that something bold needs to be done to change it.
Still, more criticism followed. Another user, PlayfulOtter, challenged Hoskinson’s market logic. He pointed out that in broader crypto markets, even $3 to $5 billion in sell pressure can cause a 15%–20% drop in market cap. That, he argued, shows how fragile sentiment can be, and why even a well-managed $100 million conversion might not go unnoticed.
Hoskinson responded by doubling down on his belief in Cardano DeFi. He argued that if the community believes in the growth of the ecosystem, then the market will naturally absorb the move. In his view, strong conviction plus proper execution equals no price disruption. But PlayfulOtter wasn’t entirely convinced, noting that finding someone to absorb $100 million worth of ADA is no small feat – regardless of execution strategy or long-term optimism.
This debate highlights a larger tension in the crypto space: how to grow an ecosystem without harming the asset that funds it. On one side, there’s urgency to build – to boost DeFi activity, to strengthen on-chain liquidity, and to catch up with chains like Ethereum and Solana. On the other side, there’s fear that aggressive moves could trigger unintended consequences – especially during a fragile market.
Hoskinson’s proposal may be bold, but it also opens the door to difficult questions about how treasury funds should be used, how risk is managed, and who gets to make those decisions in a decentralized network. Whether the community rallies behind the plan or pushes for alternatives like minting collateral-backed stablecoins, one thing is clear: Cardano’s next move will set the tone for its DeFi ambitions in 2025.
Read also: Crypto Market Meltdown? While You Panic-Sell, These Traders Loading Up Millions in ETH
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