- Charles Hoskinson believes Cardano's billion-dollar Treasury should not sit idle anymore. It's time to put the capital into service.
- He proposes strategies similar to sovereign wealth funds used by countries such as Norway and the United Arab Emirates.
Last week, Charles Hoskinson reported that Cardano (ADA) had an interesting view on what it should do with its Treasury Department. He suggested that he could not only sit in all ADAs worth around 1.7 billion, but he could take about $100 million in chunks and exchange them for stub coins like USDM, USDA, IUSD and some Bitcoin (BTC).
In a recent conversation with David Gokhshtein, Charles Hoskinson clearly stated, “If you have $1 billion in purchasing power, why not try and get it to work?” He pointed out that if Cardano's Defi Space says it needs more total value locks (TVL), more users, more yield generation products, and more activity, then that Treasury yield makes sense. “It's very easy,” he said.
Wealth fund expands itself
As outlined in our recent news brief, Charles Hoskinson's plan is to reshape Cardano's financial backbone, starting with what he calls the “stablecoin drought.” The Cardano Treasury holds ADA worth around $1.7 billion, while Stablecoins, an imbalance he calls its control Defi development on Nutwork, holds only $3,000-33 million. Comparing this to Ethereum (ETH) and Solana (SoL), Cardano is tracked backwards with a Stablecoin-tvl ratio of 190% and 110%, respectively.
According to Defilama, ADA's TVL recently reached $433.93 million, up over 71% in just 24 hours, but Stablecoins still account for just $31.64 million. For context, Ethereum's market capitalization is $125 billion and TVL is $61 billion. Solana has $10.45 billion in Stablecoins, with $8 billion locked into the Defi protocol.
To address this gap, Hoskinson proposes more than just a token swap. He is driving a sovereign wealth fund style model in which parts of the ADA are converted to Stablecoin and Bitcoin, generating annual yields of 5-10%. These returns will be reinvested to buy back the ADA and will be fed to the Treasury in a self-reliance cycle. If done correctly, Hoskinson estimates that this could generate between $5 million and $10 million a year.
the goal? Injecting fluidity is needed today, laying the foundation for long-term yield-driven stability. Another element of his proposal is governance. He proposed to form a board of trusted community members who oversee the fund, make decisions and ensure transparent and responsible management.
Of course, not everyone is on board. Some community members worry that locking ADA with a yield strategy could slow the explosive price movement they want. But for others, this is a shift towards long-term stability for Cardano, who competes with things like Ethereum.
Charles Hoskinson recently confirmed that Bitcoin is officially live on race wallets after a successful audit. Previous updates stated that Cardano is forked and another sign that he is serious about becoming a real player in the debt space. In late 2024, Hoskinson said Bitcoin Defi had come and the team was successful based on that promise.
When it comes to the market, the ADA has been riding bumps these days. Tokens have fallen by 2.6% to around $0.55 in the last 24 hours, and trading volumes have also slipped by more than 20%. Still, it zooms out a bit, and the ADA has risen 46% over the past year.
