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This article discusses whether it is wise for Cardano (ADA) to convert some of its treasury into Bitcoin and stablecoins. The author argues that this move could be beneficial for several reasons:
1. **Market maturity**: Hoskinson’s proposal is seen as a bold step towards maturity, as Ethereum has already started experimenting with stablecoin borrowing.
2. **Liquidity and risk reduction**: By allocating some portion of the ADA treasury into Bitcoin and stablecoins, Cardano can reduce its exposure to market volatility and create a more predictable interest payment environment for lending and borrowing on decentralized apps (dApps).
3. **Stimulating dApp activity**: The author suggests that this move could stimulate activity in Cardano’s ecosystem by creating a safer exposure than “gambling” on memecoins.
However, the article also highlights some concerns:
1. **Competitiveness**: The current market situation is not favorable for Cardano, as Solana has already taken an early lead and Ethereum is more advanced.
2. **Lack of scalability**: Cardano’s current blockchain performance lags behind other platforms like Solana, which may hinder the adoption of its dApps.
The author concludes that while Hoskinson’s proposal may not be perfect, it is a necessary step towards creating a more sustainable ecosystem for DeFi and staking on Cardano.
Source: cryptoslate.com
