Can Bitcoin Propel Cardano's DeFi Ambitions? Hoskinson's Strategic Vision
Key Insights
What's Hindering Cardano in DeFi?
Cardano's DeFi struggles stem from inadequate coordination and governance. Hoskinson highlights that the vast majority of ADA's 1.3 million active users are not contributing to DeFi liquidity.
Cardano's Strategy for Overcoming Challenges
Cardano plans to overcome these obstacles by integrating with Bitcoin and real-world lending, aiming to attract new liquidity and disrupt its current DeFi stagnation.
Cardano's DeFi issues are rooted in coordination challenges. According to Charles Hoskinson, the technology is not the problem; it's the community's coordination compared to Ethereum or Solana.
Rather than competing in the typical TVL race, Hoskinson is advocating for a novel approach: linking Cardano with Bitcoin and leveraging real-world lending to boost liquidity.
While Cardano lags in DeFi volume, its foundation is solid. The question remains: can it activate its user base and rejuvenate?
Unpacking Cardano's Core Issue
Hoskinson's recent remarks clarify that Cardano's low DeFi figures do not represent its actual user base. Despite having over 1.3 million users staking ADA and engaging in governance, most are not participating in DeFi.
This leads to a "chicken and egg" scenario where low on-chain activity deters liquidity and partners.
"It's not a technology issue. It's about governance, coordination, and accountability," Hoskinson explained.
To address this, Hoskinson emphasized initiatives like Midnight and RealFi, which aim to connect ADA with Bitcoin and real-world lending, thus attracting external capital.
He suggested this could unlock "billions of dollars," especially when ADA and BTC are lent, converted into stablecoins, and utilized in real credit markets.
Cardano's Development Momentum
Despite a low DeFi TVL of $271 million compared to Ethereum's $85.5 billion and Solana's $11.29 billion, Cardano's development activity index, according to Santiment data, surpassed Ethereum and Solana in late October, indicating sustained development efforts.
This contradiction highlights Cardano's challenge: it's not about demand, but activation.
ADA's Current Market Position
Currently, ADA is trading around $0.60 with a weak trend. Prices are below all major EMAs, and the RSI indicates weak momentum without signs of a bullish reversal. The CMF is slightly below zero, indicating a lack of capital inflows. Overall, ADA remains in a slow drift, with no strong indication of buyer interest returning.