Cardano founder Charles Hoskinson proposes a proactive strategy to create a self-sustaining funding loop

input:output: title: Converting $100M Worth of ADA to USDM

Cardano founder Charles Hoskinson has proposed a proactive strategy to create a self-sustaining funding loop using a portion of the ecosystem’s treasury funds.

The proposal was shared by Hoskinson during a recent Ask Me Anything (AMA) session on Saturday. It follows a user’s request for more stablecoin liquidity within the Cardano ecosystem.

Converting $100M Worth of ADA to USDM

Addressing the request, Hoskinson suggested that a portion of Cardano’s treasury, which currently holds 1.7 billion ADA ($1.23 billion), could be converted to the ecosystem’s fiat-backed stablecoin, USDM.

This proposal, according to Hoskinson, would enhance the network’s stablecoin liquidity. Specifically, he mentioned that the ecosystem team could convert 100 million ADA or $100 million worth of the token into USDM.

Following the conversion, Hoskinson proposed that Cardano could partner with major hedge fund Brevan Howard to enhance key activities within the ecosystem, including total value locked (TVL) and market-making.

Boosting Treasury Returns

Besides boosting the network’s TVL, Hoskinson asserted that the initiative could help Cardano generate an estimated annual return of 5-10%. According to him, the income generated from this initiative will be used to purchase ADA from open markets and returned to the treasury.

In a follow-up X post, the Cardano founder specifically mentioned that the initiative could generate between $5 million and $10 million worth of ADA annually.

This strategy will effectively recycle the yields into the treasury’s coffers, potentially reducing the amount of ADA in circulation.

Every year it would return 5-10 million dollars worth of ada— Charles Hoskinson (@IOHK_Charles) June 10, 2025

Attract VCs Via Strategy

Additionally, he speculated that the stablecoin liquidity strategy could also attract top venture capitalists like a16z and Pantera Capital to the Cardano ecosystem.

The Cardano founder suggested these VCs could invest between $25 million and $45 million. It is worth noting that Hoskinson has not been a fan of venture capitalists (VCs), as they have consistently over looked Cardano in favor of other blockchain projects, such as Solana.

Last year, he suggested that a16z ignored Cardano in its 2024 State of Crypto report because it owns no financial stake in the network. During Consensus 2025 in Toronto, the Cardano founder recounted how he turned down VCs’ offers to participate in the Midnight launch.

The Midnight project is expected to airdrop two NIGHT and DUST tokens to 37 million retail investors, including those holding Bitcoin and XRP. Hoskinson stressed that there is no NIGHT or DUST allocation for VCs and early insiders.