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Cardano Founder Proposes Liquidity Pool with Top Three Stablecoins

Charles Hoskinson, the founder of Cardano (ADA), recently proposed an idea that could see the blockchain benefit significantly from the launch of a liquidity pool with its three largest USD-pegged stablecoins USDA, DJED and USDM. The proposal, shared by Hoskinson with his one million followers on January 31, 2025, has since garnered the support of approximately 85% of his audience.

The proposed liquidity pool would be rebalanced monthly and managed by a third-party entity, with the primary goal of generating yield. Hoskinson invited the Cardano community to share their thoughts and propose alternative ideas for improving liquidity on the Cardano blockchain.

By the time of this report, 5,227 followers had participated in the poll, with almost 85% showing support for the idea of a liquidity pool. Hoskinson emphasized that only the Cardano community should make the decision on which entity should be responsible for the external management of the pool.

Critics, however, have suggested that Cardano should instead focus on bringing USDC to its ecosystem rather than experimenting with native stablecoins. Others argued that it may be premature to discuss the prospects of managing Cardano’s stablecoins in an external liquidity pool, given their early-stage development.

The main concern among the skeptics is the potential for stablecoin value to be moved outside of the Cardano DeFi ecosystem. In response to this, Hoskinson highlighted that additional yield would be reinjected into Cardano’s liquidity, with profits being converted back to ADA and donated to the treasury.

Based on data from DefiLlama, the net capitalization of Cardano’s stablecoins is expected to reach $25 million. Of these, DJED is the most popular, boasting a capitalization of $3.29 million and is available on Bitrue (BTR) CEX as well as on Wingriders and MinSwap decentralized exchanges. Other notable Cardano stablecoins include IUSD, USDM and USDA.

Cardano made headlines this week with the activation of its much-anticipated hard fork, Plomin, marking a significant step towards achieving complete decentralisation and community governance. This move, coupled with Hoskinson’s proposed liquidity pool, reflects Cardano’s ongoing commitment to enhancing its ecosystem and offering value to its community.