Cardano Proposes Using $1.7 Billion ADA Treasury to Boost Bitcoin DeFi Liquidity
Cardano plans to deploy its 1.7 billion ADA treasury into stablecoins and Bitcoin to attract deep DeFi liquidity. Researcher Andrew Throuvalas advocates allocating funds to major Cardano protocols—Minswap, Liqwid Finance and Indigo—to build large stablecoin pools and enable BTC holders to borrow against Bitcoin. He further suggests converting part of the treasury into BTC to pay yields directly in Bitcoin, mirroring Babylon’s mechanism that has already attracted over $4.5 billion in BTC. With 110 million transactions and 22 billion ADA staked across 3,000 pools, Cardano’s secure, Bitcoin-like architecture positions it to capture a potential $2 trillion Bitcoin DeFi market. However, it must quickly fill gaps in stablecoin liquidity and compete with ecosystems like Arbitrum. Successful treasury deployment could solidify Cardano as a premier hub for Bitcoin DeFi and drive long-term demand for ADA.
Bullish
Allocating Cardano’s treasury to stablecoins and Bitcoin pools should significantly enhance DeFi liquidity, attracting BTC holders and institutional interest. Similar yield mechanisms like Babylon’s have proven successful, drawing billions of dollars in BTC. If executed swiftly, this strategy leverages Cardano’s security and staking growth to capture a portion of the expanding Bitcoin DeFi market. In the short term, the conversion may create ADA selling pressure, but long-term demand is likely to rise as liquidity deepens and new use cases emerge.