Charles Hoskinson, the founder of the Cardano network, has fired a shot at the ADA community for contributing to their DeFi shortcomings.
Notably, he highlighted this in his recent podcast, as he suggested that Cardano users are contributing to the struggles in decentralized finance (DeFi). Hoskinson noted that the total value locked on the chain would be between seven and eight digits had ADA users adopted their native DeFi platforms.
Cardano DeFi Struggles: Community Part of the Problem
Notably, Cardano lags in decentralized finance compared to its status and counterparts. As a utility network, it ranks the lowest among smart contract native chains in its pedigree by a considerable margin, with new and emerging ecosystems still outperforming Cardano.
ADA ranks 10th on the cryptocurrency market cap ranking, with a valuation of $20.6 billion. No other asset in the bracket, aside from Dogecoin and XRP, which lack native DeFi functionalities, has a total value locked (TVL) of less than $5 billion. However, Cardano has just $262 million, ranking 24th by chain on DeFiLlama.
Several industry commentators, including Hoskinson, have attributed this problem to various ecosystem shortcomings. However, yesterday, the founder introduced a new perspective. Specifically, he noted that it is a “fundamental problem” that even ADA users are not using Cardano-native DeFi products.
Hoskinson questioned how they would be able to convince users of Solana, Ethereum, and other chains to “come and play in our backyard if our own people and our own ecosystem aren’t using our DeFi products.”
Cardano TVL Would Have Been Much Larger
Meanwhile, Hoskinson emphasized that this concern needs proper deliberation within the community, and the reason for the truancy needs to be explained. Notably, he cited several potential problems, including a lack of technical know-how, security issues, poor user experience, and low yields.
Furthermore, he insisted that addressing this menace would substantially boost DeFi usage. Specifically, he noted that Cardano’s TVL should be at least $5 to $10 billion, rather than the current figure.
Notably, a $10 billion ADA TVL represents an impressive 3,716% increase from the $262 million figure reported by DeFiLlama, potentially taking the chain to third in the current ranking, just behind Ethereum ($84.22 billion) and Solana ($11.17 billion).
Reactions also supported this narrative. A user highlighted that Cardano has enough users and capital to build a thriving DeFi ecosystem independently, but holders are not actively participating in the chain.
This conversation contributes to the growing effort to increase Cardano’s TVL. Recall that Cardano is working to unlock Bitcoin and XRP DeFi, teased to change their struggling state in the sector.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
