Cardano Founder Proposes 100M USD Ecosystem Boost
As sovereign wealth funds in traditional finance rely on diversification to generate reliable annualized returns, decentralized ecosystems are beginning to adopt similar strategies.
As sovereign wealth funds in traditional finance rely on diversification to generate reliable annualized returns, decentralized ecosystems are beginning to adopt similar strategies. With DeFi and TradFi steadily converging into a unified financial layer, it is becoming more likely that digital nation-states like Cardano will diversify their treasuries to strengthen their networks while earning yield. In June 2025, Charles Hoskinson proposed using 100 million dollars worth of ADA from the Cardano treasury to mint stablecoins and acquire Bitcoin in pursuit of that goal. This article will talk about Charles’ proposal, its benefits to the Cardano ecosystem, and more.
Ecosystem Boost Proposed By Hoskinson on X
On June 12th, Charles Hoskinson released a video called “Cardano Decentralized Sovereign Wealth Fund.” In it, Charles spoke about liquidity portfolio management and how Cardano’s treasury could be put to more productive use. He pointed out Cardano’s disproportionately low ratio of stablecoins in comparison to its DeFi TVL. At the time, only around 33 million dollars worth of stablecoins were present in the ecosystem, while total DeFi TVL sat at about 330 million dollars. That amounts to less than 10 percent.
In comparison, leading smart contract platforms such as Ethereum and Solana show far higher ratios of stablecoin liquidity. Ethereum’s ratio stands at 190 percent, while Solana’s is around 110 percent. Charles explained that although the Cardano treasury is consistently replenished through transaction fees, it currently lacks any yield-bearing instruments that could generate ongoing returns. This results in a treasury that grows slowly and remains mostly idle instead of compounding over time.
Describing Cardano as a digital nation state, Charles compared its situation to that of Norway and Abu Dhabi. Both countries operate sovereign wealth funds valued at over 1 trillion USD, with strict rules on how much of the fund can be used and what types of investments are allowed. These funds are diversified across global assets and consistently earn annualized returns that fuel long-term national growth. Charles argued that Cardano could learn from these real-world models to strengthen its own ecosystem financially.
He proposed that Cardano allocate 100 million USD worth of ADA from the treasury to mint native stablecoins such as USDM and USDA, as well as synthetic ADA-backed assets like iUSD. A portion of that amount could also be used to purchase Bitcoin in order to kickstart Bitcoin-based DeFi on Cardano and attract Bitcoin holders through yield incentives. This move, according to Charles, could help solve multiple problems at once by boosting liquidity, stimulating growth, and earning yield. His proposal invites the community to think seriously about how Cardano’s treasury can be used not just for development, but for long-term ecosystem growth.
Norway’s sovereign wealth fund, now worth over 1.7 trillion dollars, has averaged a 6.34 percent annual return since 1998. That translates to well over 1 trillion dollars in cumulative gains, all reinvested to strengthen Norway’s economy and future. For a digital ecosystem like Cardano, adopting a similar long-term, diversified treasury strategy could yield hundreds of millions in annual returns, even with a smaller base. By reallocating dormant treasury funds into carefully managed DeFi instruments, Cardano could create a self-sustaining financial engine that mirrors how Norway’s fund transformed oil revenues into generational wealth.
Stablecoin Fund Won’t Tank ADA Price
Charles spoke about some of the community feedback he received regarding the concern that selling such a large amount of ADA could have a detrimental effect on the price. In his live video, Charles explained that if the ADA is sold over-the-counter as planned, there would be almost no impact on market price. This is the same approach that will be used by IOG when selling funds allocated for Cardano development through the new governance process the blockchain is moving through.
Over-the-counter desks specialize in facilitating large transactions between parties without using open market order books. By matching buyers and sellers directly, they help avoid slippage and volatility, making them the preferred method for institutional-scale movements of assets like ADA. According to Charles, this mechanism allows for gradual selling without disrupting the broader market, preserving price stability.
Numerous community members with real industry experience offered perspectives that aligned with this view. One such example is Phillip Pon, the CEO of Emurgo. Mr. Pon has worked at multiple centralized exchanges and OTC desks, and shared the opinion that if the ADA is sold OTC and over time, it would have virtually no impact on the price. He added that not only would this approach avoid downward pressure, but that decentralized applications in the Cardano ecosystem are in dire need of increased liquidity to grow and succeed. Phillip also noted that keeping the entire treasury in a single asset such as ADA carries its own form of risk, and that adding stablecoins and Bitcoin to the mix would help mitigate volatility while strengthening the utility of Cardano’s treasury as a long-term economic engine.
How Will This Benefit Cardano?
Bootstrapping Cardano’s stablecoin ecosystem with 140 million USD, along with moving a portion into Bitcoin, would immediately solve two major gaps in the ecosystem. Bitcoin DeFi on Cardano is a major narrative, and if we want to be taken seriously by the Bitcoin community, we need to show it by seeding the initial liquidity. Nobody wants to enter a low liquidity environment. At the same time, traders need deep stablecoin liquidity, which the ecosystem currently lacks. Once that infrastructure is in place, it sets the foundation for serious capital to enter. VCs and funds chasing low risk yield will follow and bring their own liquidity. That kind of volume brings price action, and price action brings more users, more traders, and more projects launching. Taking the yield from the treasury’s stablecoin position, converting it to ADA, and returning it to the treasury gives Cardano a diversified and growing reserve that pushes the ecosystem forward on every front.
Conclusion
Cardano’s treasury sits mostly idle while the ecosystem struggles with low stablecoin liquidity and underutilized financial infrastructure. Charles Hoskinson’s proposal offers a path forward by using a small portion of that treasury to unlock growth, generate yield, and lay the foundation for a self-sustaining economy. With no venture capital firms propping the ecosystem up, Cardano must rely on its own resources to build what others outsource. Even Polkadot is now weighing a similar move by diversifying its treasury into Bitcoin, showing that this conversation extends beyond a single chain. If Cardano gets this right, it could set a precedent for how decentralized networks can fund their futures without compromising their values.
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