Hoskinson: Cardano’s 1.7B ADA Treasury Could Earn $5–10 Million in ADA Each Year

In a recent AMA session, Cardano founder Charles Hoskinson a bold proposal to enhance stablecoin liquidity in the Cardano ecosystem. Specifically, he suggested converting $100 million worth of ADA in the treasury into USDM, a native Cardano-backed stablecoin.

Hoskinson noted that the Cardano treasury currently holds approximately 1.7 billion ADA. It could be partially utilized to deploy a liquidity initiative to jumpstart decentralized finance (DeFi) activity across the network.

“We could convert a hundred million ADA into USDM, put financial infrastructure behind it, and start building up trading, market-making, and total value locked (TVL) in the Cardano ecosystem,” Hoskinson said.

Hoskinson’s proposal includes a self-sustaining economic model. According to Hoskinson, such a move could yield 5–10% annual returns. He suggested using the earnings to repurchase ADA and reinvest in the treasury. In his view, this strategy would grow the treasury and provide ongoing support for the ecosystem.

“You could get 5 to 10% returns, purchase ADA every year with it, and donate it back to the treasury,” he said. “We could do that.”

Hoskinson also reinforced the idea in a remark on X to the proposal as it gains traction in the community.

Hoskinson also hinted that such a liquidity strategy could attract major venture capital players like a16z or Pantera Capital, with deal sizes ranging from $25 to $45 million. Structuring a fund that returns profits to the Cardano treasury could further bolster ecosystem sustainability.

“You can even set up a scheme where the returns go to the Cardano treasury. There’s so much potential, we just need to act.”

Alongside the proposal, Hoskinson voiced his frustration with the Cardano community’s hesitation in leveraging ecosystem infrastructure such as Intersect, a governance body designed to administer treasury-funded initiatives. He argued that Intersect is well-positioned to manage such operations on behalf of the entire network.

Intersect was set up to give you guys the freedom to do exactly these types of things,

He noted frustration over community inaction and infighting. Specifically, he pointed out that significant partnerships, such as onboarding Circle and minting USDC on Cardano, are examples of missed opportunities due to a lack of commitment and execution.