Cardano Foundation Allocates $50M to Enhance Liquidity and Adoption

TLDR

• The Cardano Foundation has proposed allocating 50 million ADA, worth about $40.5 million, to a new liquidity fund.
• The liquidity fund aims to enhance stablecoin adoption and expand DeFi activity within the Cardano ecosystem.
• Cardano expects the liquidity deployments to generate about 4% annual returns, benefiting the network’s revenue.
• The revenue from the liquidity fund will be split between the treasury and the protocols, with 15% going to the treasury each month.
• Cardano’s roadmap outlines plans to scale Web3 adoption, integrate more exchanges, and pursue real-world asset tokenization.

The Cardano Foundation has proposed a major initiative aimed at boosting liquidity, stablecoin adoption, and decentralized finance (DeFi) activity. The foundation will allocate 50 million ADA, approximately $40.5 million, to create a liquidity fund. The goal is to enhance the ecosystem by addressing liquidity shortages and expanding stablecoin supply.

Liquidity Fund to Strengthen Cardano Ecosystem

According to the Cardano Foundation, improving liquidity remains a critical challenge for the network. The proposed fund aims to deepen liquidity and increase trading volumes. These efforts are expected to generate sustainable revenue, which will be split between the treasury and the deployed protocols.

The foundation believes that a stronger liquidity foundation will encourage growth across various Cardano protocols. It estimates that the deployments could provide an annual return of about 4%. As trading volumes increase, the Cardano ecosystem will likely experience more yield generation, benefiting the network in the long term.

The foundation plans to allocate 15% of the liquidity fund’s revenue to the Cardano treasury every month. The remaining 85% will stay within the deployed protocols to further compound the liquidity growth. This strategy is designed to build a sustainable revenue model for Cardano’s ecosystem.

Foundation Commits $1.62 Million to Venture Hub

Cardano’s latest roadmap outlines several strategic objectives to increase adoption. The foundation will focus on expanding its Web3 team, integrating exchanges, and developing enterprise use cases. Cardano also plans to strengthen its efforts in real-world asset (RWA) tokenization, having already launched $10 million worth of tokenized finance.

In its efforts to scale further, Cardano will commit 2 million ADA ($1.62 million) to its Venture Hub. This initiative is designed to support startups through partnerships with Draper University, Techstars, and CV Labs. The foundation expects the venture hub to play a significant role in boosting the sustainability of Cardano projects.

Cardano also seeks to improve governance through the delegation of 220 million ADA across new DReps. This is part of the foundation’s effort to broaden the involvement of governance actors in shaping the network’s future. By reducing its own self-delegation, Cardano aims to increase decentralization and community participation.

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