ADA Falls 6% as Cardano Faces Community Divide on $100 Million Stablecoin Proposal

Cardano Faces Internal Rift as $100M Stablecoin Liquidity Plan Pressures ADA Price

Cardano’s ADA token fell over 6% on Thursday as tensions flared within the community over a bold proposal to deploy 140 million ADA from the project’s treasury to jumpstart stablecoin liquidity.

The proposal, championed by Cardano founder Charles Hoskinson, aims to address what he calls a “critical gap” in Cardano’s DeFi stack: the lack of deep, reliable stablecoin liquidity. However, the plan has ignited controversy across the ecosystem, with concerns mounting over its potential impact on market dynamics.

Critics, including influential voice @cardano_whale, warned that injecting such a large supply of ADA into circulation could have unintended consequences. “Any transparent attempt to sell ADA at $0.70 could result in it being dumped closer to $0.50,” he said, pointing out that governance proposals are frequently front-run by traders. He proposed an alternative route—minting crypto-collateralized stablecoins like ObyUSD—to sidestep direct sell pressure.

Hoskinson pushed back against the criticism, dismissing the fears as exaggerated. He argued the treasury could convert ADA using non-disruptive methods, such as TWAP orders or OTC deals, spreading execution over time. He emphasized that stablecoin depth is not a luxury but a necessity—and one that could enable Cardano’s DeFi sector to grow while generating non-inflationary revenue for the ecosystem.

The community remains split. Some view the proposal as a necessary catalyst to unlock DeFi adoption on Cardano. Others argue that with ADA struggling to stay above $0.68 and broader markets under pressure, the timing may be off. The debate has quickly become a proxy battle between ecosystem growth advocates and those prioritizing short-term price stability.

Market Snapshot:

ADA dropped from $0.688 to $0.625, before recovering to $0.641, ending the day down 6.01%.
High-volume selling between 01:00–02:00 UTC carved out strong support near $0.622.
The rebound formed a rising price channel, with higher lows pointing to gradual accumulation.
However, resistance at $0.645 has held, limiting further upside, while volume spikes near 13:50–14:00 UTC (2.6M and 5.7M ADA) showed trader interest but muted momentum.

As the proposal heads toward a potential governance vote, its outcome may shape not just Cardano’s stablecoin strategy, but also the evolving culture of its decentralized decision-making.