Charles Hoskinson, the founder of Cardano, recently proposed an intriguing plan to convert approximately $100 million worth of ADA in the treasury into the platform's native-supported stablecoin, USDM. This strategic deployment has multiple strategic significances.
First of all, this move will significantly enhance the liquidity of the network ecosystem. Stablecoins, as a key infrastructure for the development of DeFi, can facilitate trading activities and market-making processes within the Cardano network, thereby increasing the overall locked value and creating a more favorable environment for decentralized financial services.
In terms of the economic model, the proposal designs a self-sustaining operational mechanism, expected to generate an annual return of 5% to 10%. These returns will not flow out but will be used to repurchase ADA from the open market and deposit it into the treasury, forming a virtuous cycle that reduces circulating tokens and expands reserve size, providing long-term stable support for the ecosystem.
From an investment attractiveness perspective, if the proposal is successfully implemented, it may attract the attention of well-known venture capital firms such as a16z or Pantera Capital, bringing more capital support and strategic resources to the Cardano ecosystem, and promoting the overall development process.
In the competitive landscape, stablecoins have become strategic assets in the blockchain field. Ethereum currently dominates the total locked value of stablecoins, while Cardano, by improving its stablecoin architecture, can enhance its competitive strength in the DeFi market, attract more developers to participate in ecosystem building, and expand its user base.
This proposal reflects Cardano's determination to actively adjust strategies and optimize ecological structure in the face of fierce competition in the public chain environment, and also reflects the project team's forward-looking thinking on the future development direction of DeFi.
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Charles Hoskinson, the founder of Cardano, recently proposed an intriguing plan to convert approximately $100 million worth of ADA in the treasury into the platform's native-supported stablecoin, USDM. This strategic deployment has multiple strategic significances.
First of all, this move will significantly enhance the liquidity of the network ecosystem. Stablecoins, as a key infrastructure for the development of DeFi, can facilitate trading activities and market-making processes within the Cardano network, thereby increasing the overall locked value and creating a more favorable environment for decentralized financial services.
In terms of the economic model, the proposal designs a self-sustaining operational mechanism, expected to generate an annual return of 5% to 10%. These returns will not flow out but will be used to repurchase ADA from the open market and deposit it into the treasury, forming a virtuous cycle that reduces circulating tokens and expands reserve size, providing long-term stable support for the ecosystem.
From an investment attractiveness perspective, if the proposal is successfully implemented, it may attract the attention of well-known venture capital firms such as a16z or Pantera Capital, bringing more capital support and strategic resources to the Cardano ecosystem, and promoting the overall development process.
In the competitive landscape, stablecoins have become strategic assets in the blockchain field. Ethereum currently dominates the total locked value of stablecoins, while Cardano, by improving its stablecoin architecture, can enhance its competitive strength in the DeFi market, attract more developers to participate in ecosystem building, and expand its user base.
This proposal reflects Cardano's determination to actively adjust strategies and optimize ecological structure in the face of fierce competition in the public chain environment, and also reflects the project team's forward-looking thinking on the future development direction of DeFi.