On June 16th, there was another stir in the cryptocurrency field. Anatoly Yakovenko, the co-founder of Solana, publicly expressed strong opposition to Cardano’s proposal to sell $100 million worth of ADA to purchase Bitcoin and stablecoins, directly stating that the decision was “too stupid”. This intense statement instantly ignited the discussion heat in the crypto community, pushing Cardano’s current asset conversion plan to the forefront of public opinion.
Yakovenko believes that the project team only needs to hold short-term Treasury bonds for 18 to 36 months as emergency funds. He is very puzzled by Cardano’s plan to hold Bitcoin for users and has raised doubts. This view of his reflects the huge differences among different project parties in terms of the reserve strategies for crypto assets. In Yakovenko’s view, short-term government bonds can provide relatively stable and liquid emergency funds for projects, while getting involved in Bitcoin investment is not a necessary move and may even bring additional risks.
The source of this controversy is the proposal put forward by Charles Hoskinson, the founder of Cardano, on June 14th, whose core purpose is to enhance the liquidity of stablecoins in the Cardano DeFi ecosystem. At present, the scale of the stablecoin on the Cardano chain is only 33 million US dollars. Such a meager volume has made Hoskinson deeply feel that the development of the ecosystem has been seriously threatened. In his view, selling off some ADA to purchase Bitcoin and stablecoins can effectively improve this situation and inject new vitality into the ecosystem. However, many members of the community are deeply worried about this. They are concerned that the large-scale sale of ADA will trigger market panic, which in turn will have a huge impact on the coin price and deal a heavy blow to the market value of Cardano.
Hoskinson tried to allay the community’s concerns, insisting that the current market depth is sufficient to absorb the selling pressure. Cardano has already established a certain position in the cryptocurrency market, with a large number of users and investors. To a certain extent, its market depth can indeed buffer large-scale transactions. But the market situation changes rapidly. Once the selling action begins, it remains unknown whether it can really be as stable as he expects. After all, the price fluctuations in the cryptocurrency market are influenced by multiple factors. Investor sentiment, the overall market trend, and the macroeconomic environment all affect the cryptocurrency price.
From the development history of the crypto market in the past, it is not uncommon for different projects to have differences in asset allocation and strategic decisions. In the SEC’s lawsuit against Binance, crypto assets such as SOL and ADA were classified as securities. This incident further highlighted the complexity of crypto assets at the regulatory level and also sparked widespread opposition from the crypto community. Charles Hoskinson, the founder of Cardano, had previously made an optimistic prediction about the price trend of Bitcoin, believing that with the entry of tech giants into the crypto field and the advancement of stablecoin legislation and other factors, the price of Bitcoin is expected to rise significantly. Nowadays, however, he has proposed selling the ADA of his own project to purchase Bitcoin. This change undoubtedly makes it hard for some community members to accept.
The intense opposition from Solana Co-creation might also stem from its maintenance of its own project ecosystem and its different judgments on the market landscape of crypto assets. Solana and Cardano are both influential projects in the cryptocurrency market, and they are in competition in areas such as smart contracts and blockchain performance. If Cardano’s move is successfully implemented, it may change the flow of market funds and have an indirect impact on the development of the Solana ecosystem.
At present, the debate within the Cardano community over this proposal is still ongoing. Community members need to weigh the pros and cons of whether to hold onto ADA and wait for the natural development of the ecosystem or follow the proposal to convert assets to improve the liquidity predicament of stablecoins. The statement made by the Solana co-creation team undoubtedly adds a new variable to this debate. Investors and observers in the cryptocurrency market are also closely following the subsequent development of the event. This controversy not only concerns the future direction of the two projects, Cardano and Solana, but may also have a profound impact on the asset allocation and project development strategies of the entire cryptocurrency market.
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