Below is a guest and analysis leaflet from Shane Negle, editor -in -chief of the distinguished symbol.
On June 13, Charles Hoskinson, co -founder of ETHEREUM (ETH) and Cardano (Ada) founder, to make A bold proposal. In order to place Cardano on the decentralized financing map (Defi), the Blockchain ecosin system must create a sovereign wealth box.
Specifically, to convert 5-10 % of the ADA (about $ 1.2 billion) into more difficult assets such as Bitcoin or symbolic dollars in Stablecoins. Let’s study the effects of this proposal for Cardano and the broader encryption market.
The sovereign wealth box point
Sovereign wealth boxes are usually associated with governments. An example of this: The oil -rich Norway has the global government pensions (GPFG), from which the government draws an amount equal to about 20 % of the country’s budget. Although oil and gas production was the basis for the fund’s growth, this sector now represents less than half of the total value of the fund.
Instead, the fund grows from shares – 9,000 companies worldwide – on its side of fixed income such as bonds (debts issued by governments), real estate and renewable infrastructure. From 2019 to 2024, the value of the sovereign wealth in Norway doubled, from 996 billion dollars to nearly $ 2 trillion.
Therefore, GPFG constantly embodies gains from the wide market revenues, but also from the government’s need to continue spending through debt. Hoskinson hopes to make similar gains by exposure to Bitcoin/Stablecoins, then use these revenues to gain more ADA, which would enhance the ADA price.
This strategy is sound for two reasons:
- First, the United States government is sure to spend its capabilities, which will erode the power of buying people with the US dollar. The institutional character has already been added through the circulating investment funds, which means that Bitcoin will continue to work as the origin of the wealth mine due to its fixed scarcity and work security. Likewise, outside the bitcoin mining companies that are likely to create the pressure pressure, Bitcoin is not one of the assets concerned with profits, unlike stocks.
- Second, exposure to Stablecoins is exposure to USG itself. Both the circuit (USDC) and Tether (USDT) have a huge exposure to the US Treasury Secretary. While Teth is approaching 120 billion dollars In US Treasury bonds, a quarter of $ 1 billion is profit, Fund Reserve Department He has 49.64 % in the debts of the US Treasury and 50.36 % in the US Treasury Return Conventions.
Due to such an exposure, the first Stablecoin is now important generators to order US debt. While they earn the return, USG is happy because Stablecoins provides financial domination to the digital field. Moreover, this maintains the return on the American cabinet at a controlled level.
The current US Minister of Trade, Howard Lootnick, had already explained this in April 2024, when Cantor Fitzgerald CEO:
“The domination of the dollar is essential to the United States of America. It is important to us, for our economy … and for this reason I am a fan of the supported Stablecoins. I am a fan of Tether. I am a fan of the circle.”
Cardano will also be to Stablecoins in time because it is the first Blockchain origin Comprehensive organization.
What about Cardano (Ada)?
A year to date, ADA decreased about 35 % but by 56 % over one year. Of the maximum supply of 45 billion ADA, Cardano has 35.36 billion ADA, leaving many distinctive symbols so far to enter trading and possibly drop the Ada price if the demand is not there. Cardano’s annual inflation rate is about 2 %, which is the target inflation rate for the federal reserve.
The ADA Treasury allocation is approximately 31 %, 5-10 % of which will be converted into Bitcoin or Stablecoins. As evidence for work, Cardano gives 80 % of restrictions restricted to fighters, while 20 % are dedicated to the Treasury Department.
Given the relatively high inflation rate of 2 % Cardano (Bitcoin has 0.82 %), converting more Ada to Bitcoin/Stablecoin will constitute great pressure for sale that will inhibit the Ada price. However, Hoskinson believes this can be mitigated.
Specifically, if 140 million ADA is transferred to BTC/Stablecoins, then these purchases will be distributed over a week through the exchange offices that do not need a prescription (OTC) using the average time price strategy (Twap). TWAP depends on a dedicated Time settings in strength To control the timing of implementation and reduce the failure of the market.
It is worth noting that Michael Sailor uses this strategy BTC strategic accumulation. After all, since the MSTR share price is exposed to the agent to Bitcoin, it is in the interest of Silor to go under the radar while implementing the request. Likewise, Hoskinson will have to maintain the average market price in Ada to avoid overcoming the market.
In the long run, if the gains from BTC and Stablecoin lead to ADA-similar to shares of shares-Hoskinson can get the same benefit as Saylor with MSTR, which regularly outperforms Bitcoin itself due to the positive arrival of credit markets.
What about the basic demand for Cardano?
As the original co -founder of Ethereum, Hoskinson Cardano has launched a strong alternative to profits. To become a Blockchain environmental system for Defi, Cardano was first to complete the functions of the smart nodes. This has become possible with the completion of the Goguen era, which consists of Allegra, Mary and Alonzo Hard Forks in September 2021.
He is still in the scaling phase in Basho before the Voltaire Governance era, performed by Cardano Blwchin is behind the 10 best artists, headed by Solana. According to Chainspect, Cardano was ranked 34th in actual time transactions (TPS) at 0.26 TX/s for the maximum theoretical TPS of 18.02 TX/S.
This gives a two -minute series against Solana 12.8 seconds. Suffice it to say, until the Basho, especially the Hydra Layer-2 solution, is not completed. This is not a competitive position. It also does not reinforce confidence that Cardano is more than three years old.
Besides the retail of the encryption market, and a devastating bankruptcy series during 2022, its peak in the FTX collapsed, Cardano only holds $ 267.5 million in Defi applications compared to $ 8.3 billion in Solana, or 62.7 billion dollars closed at DAPPS ETAREUM.
Moreover, Stablecoins is only $ 31.44 million in Cardano.
Looking at the diminishing gains in the broader Altcoin market, where more symbols have been launched, it is now important that you have a stablecoin price anchor. This would make lending and borrowing on DAPPS less dangerous with predictive benefits payments.
Likewise, Stablecoins on decentralized exchanges (Dexes) provides a lower slide and a decrease in unstable loss, providing stable cultivation in this process. Stablecoin (about $ 100 million) is likely to increase the Cardano DAPP activity. After all, exposure will be safer than gambling on the mechanics fraudulent to a large extent.
Indeed, the best DAPP of Cardano by a unique active portfolio (UAW) is a Dex complex called Dexhunter, while borrowing and DAPP LENFI carries more valuable at 11.62 million dollars. Of course, these numbers are pale compared to the activity of DAPP on the 10 best sets of rings, which is the reason for urgently needing Hoskinson.
The bottom line
In late May, Ethereum borrowed $ 2 million of AAVE Stablecoins with ETH wrapped (Weth) as a guarantee. This dynamic, which was not needed to sell ETH, indicates a more mature environmental system that Kardano has not yet approached.
However, to reach this maturity, Cardano must start making bold moves. The customization of a portion of the ADA cabinet in Bitcoin and Stablecoins is a path in the right direction. At a glance, it may seem that Hoskinson gives preference to BTC on ADA with this step, but it is mixed to the categories.
It is widely understood that Bitcoin works as a store for value rather than the smart nodes of general purposes such as Cardano. Finally, the current Trump administration clearly indicated that Stablecoins will be an adequate alternative to the canceled CBDC. During this period, Cardano must stimulate the activity, without waiting for the end of the expansion era.
