Cardano’s Charles Hoskinson has outlined plans to strengthen liquidity levels soon. Hoskinson is confident that converting millions of ADA tokens to Bitcoin and other stablecoins could accomplish this. More…
Cardano’s Charles Hoskinson has outlined plans to strengthen liquidity levels soon. Hoskinson is confident that converting millions of ADA tokens to Bitcoin and other stablecoins could accomplish this.
More precisely, the Cardano boss told viewers on a recent YouTube live stream that setting aside $100 million worth of ADA tokens from its treasury and converting them to Bitcoin and selected stablecoins could strengthen Cardano’s DeFi network.
As he is quoted as saying;
“What I’d like to see is could we take about $100 million worth of ADA in the treasury and convert it to a blend of a collection of stable coins and incumbent in Cardano, so USDM, USDA, as well as ADA-backed stablecoin synthetics like IUSD, and also convert some of it to Bitcoin to prime the Bitcoin DeFi.”
He asserts that the goal is to increase the DeFi to stablecoin ratios, bringing them into line with those of other DeFi ecosystems. Hoskinson targets a 33% to 40% ratio between stablecoin issuance and total locked value (TLV) on the network.
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Hoskinson further explained that with millions of ADA transfers being recorded daily, a significant transfer of funds might have little to no impact on the price of the ADA token as liquidity could still be enhanced with over-the-counter trades, among other things.
“Hundreds of millions of dollars of ADA change hands on a daily basis, and the markets are deep enough that it could absorb within 30 to 90 days using TWAPs, OTCs, and other mechanisms, a hundred million dollar sale without moving the ADA price in any significant fashion.” He stated.
At report time, ADA is valued at $0.6 per token. With altcoins collectively taking a hit, ADA has also not been spared. While 30-day losses have crossed 20%, over 4.35% has been sustained in losses over the last 7 days.
