Cardano Drops 6% as $100M DeFi Treasury Proposal Sparks Fierce Debate – BlockNews
ADA dropped 6% amid macro pressure and a $100M treasury proposal to fund stablecoin liquidity. Critics warn of heavy sell pressure, while Hoskinson defends a gradual execution strategy to protect price. ADA is showing signs of mild recovery, but resistance at $0.645 remains a short-term challenge. Cardano’s ADA token took a 6.01% hit on Wednesday,
- ADA dropped 6% amid macro pressure and a $100M treasury proposal to fund stablecoin liquidity.
- Critics warn of heavy sell pressure, while Hoskinson defends a gradual execution strategy to protect price.
- ADA is showing signs of mild recovery, but resistance at $0.645 remains a short-term challenge.
Cardano’s ADA token took a 6.01% hit on Wednesday, falling to $0.6412 amid a mix of macro-driven market weakness and a contentious internal debate over a $100 million DeFi stimulus plan. The proposed allocation of 140 million ADA from the treasury has split the community, with supporters calling it a strategic push for DeFi growth and critics warning of short-term sell pressure.
Governance Split Over Stablecoin Liquidity Plan
TapTools triggered the discussion with a poll asking whether the treasury should inject funds to support stablecoin liquidity, particularly USDM. However, vocal community figures like @cardano_whale expressed concern that announcing a large ADA sale could tank prices—possibly pushing the value down to $0.50 if traders front-run the move. He instead recommended minting crypto-backed stablecoins like ObyUSD to preserve market stability.
Hoskinson Counters With Strategic Sell Plan
Cardano founder Charles Hoskinson rebutted those concerns, calling them misleading. He argued that the ADA could be converted slowly via OTC deals or algorithmic strategies like TWAP to reduce impact on price. Hoskinson underscored the lack of stablecoin depth as a major bottleneck for Cardano DeFi, emphasizing the proposal’s potential to create long-term, non-inflationary treasury revenue.
— THEDEFIGURU (@TheDeFiGuru_) June 12, 2025🚨Is ADA Coming Back or Is It Game Over? A Simple Breakdown of Cardano’s Mess in 2025
ADA looked strong early this year. It was even doing better than Bitcoin for a while.
But now? It’s down 26% since January.What happened? Let’s break it down ⤵️
First, Bitcoin kept going up… pic.twitter.com/O8Qaa3APIv
Technical View: Bouncing, But With Resistance
Technically, ADA saw a sharp drop to $0.625 before bouncing to $0.641. A rising channel is beginning to form, suggesting some accumulation, but resistance at $0.645 has capped upward momentum so far. Volume spikes during the dip and brief recovery hint at strong trader engagement, though without sustained bullish follow-through just yet.
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