Cardano News Today: Cardano’s DeFi Challenges: Lack of User Engagement and Issues in Governance

Bitget-RWA2025/11/06 04:58

By:Bitget-RWA

- Cardano founder Charles Hoskinson blames user apathy for DeFi stagnation, citing low TVL ($262M) compared to Solana ($11.17B) and Ethereum ($84.22B). - He emphasizes governance/coordination gaps over technical flaws, noting 1. 3M stakers hold $15B but lack liquidity participation despite stablecoin availability. - Cardano's roadmap prioritizes Bitcoin interoperability and real-world finance via projects like Midnight and RealFi to unlock ADA/BTC liquidity. - Market skepticism persists as ADA drops 6.2% a

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Cardano (ADA), once considered a strong competitor to

Ethereum

, is now facing a pivotal moment as its founder Charles Hoskinson addresses criticism regarding the platform’s underdeveloped decentralized finance (DeFi) sector. Despite having a total value locked (TVL) of only $262 million—placing it 24th worldwide—Hoskinson has shifted the conversation from technical limitations to user participation, asserting that

ADA

investors are not embracing the platform’s DeFi offerings (

Cardano founder blames users

). Compared to

Solana

($11.17 billion) and Ethereum ($84.22 billion), Cardano’s TVL is significantly lower, even though its 1.3 million stakers collectively hold $15 billion in ADA, as Hoskinson pointed out in a

Yahoo Finance interview

Hoskinson described the situation as a “chicken-and-egg” dilemma: minimal DeFi activity discourages new partnerships and liquidity, while limited external connections slow down on-chain growth, a point he reiterated in his Yahoo Finance interview. He rejected the idea that simply adding major stablecoins like

USDT

USDC

would automatically drive expansion, noting that

Cardano

already features asset-backed stablecoins (USDM, USDA) with reliable pegs, as highlighted in a

BeInCrypto report

. Instead, he pointed to issues of governance and coordination within the ecosystem, stating, “The challenge isn’t technological. It’s about governance and collaboration.”

Cardano News Today: Cardano’s DeFi Challenges: Lack of User Engagement and Issues in Governance image 0

Hoskinson’s remarks have ignited discussion. Some community members believe that ADA holders lack sufficient motivation—such as attractive returns, user-friendly platforms, or strong security—to participate in DeFi, as reported by TheCryptoBasic. Others argue that Cardano’s robust governance, reflected in its 1.3 million active stakers, is a sign of a thriving network, according to a

Bitcoinist article

. Hoskinson acknowledged both perspectives, noting that while staking is high, it does not equate to providing liquidity, and bridging this gap could potentially raise TVL to between $5 and $10 billion.

To tackle these issues, Cardano is following a long-term strategy focused on

Bitcoin

compatibility and integrating with traditional finance. Initiatives such as Midnight (a privacy-oriented sidechain) and RealFi (a microfinance solution for Africa) are designed to unlock liquidity by allowing ADA and BTC to be lent, converted into stablecoins, and used in lending products, Hoskinson explained to Yahoo Finance. He also mentioned Leios, a protocol-level advancement, as proof of Cardano’s ongoing technical progress, as also noted by BeInCrypto.

The need for change is highlighted by falling on-chain activity. According to Bitcoinist, ADA’s daily active addresses dropped from over 32,000 in mid-October to 24,000 in early November, while the token’s price slipped below $0.57 amid a broader crypto downturn. Hoskinson clarified his previous statements, emphasizing that he was not “blaming the community” but rather pointing out a lack of participation. “I’m not holding any individual in the Cardano ecosystem responsible,” he stated.

Market experts remain cautious. With ADA currently trading at $0.5417—a 6.2% decrease in the past day—and the overall crypto market down 4%, Cardano faces mounting pressure to achieve concrete progress. Hoskinson’s plan relies on activating passive ADA holders through focused outreach and accountability, but as BeInCrypto has reported, the journey toward revitalizing Cardano’s DeFi sector is still filled with obstacles.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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1. Technology stocks fell sharply as investor interest shifted toward energy and selected defensive assets. From October 10 to 16, the Nasdaq 100 declined 5.49% and the S&P 500 fell 1.95%, while the Dow gained 0.67% and WTI crude rose 10.41%. BTC, ETH, and SOL declined 1.27%, 2.65%, and 4.44%, respectively. This week's technology earnings will be an important test of whether revenue growth, margins, and cash flow can justify current valuations. Better-than-expected results could help stabilize markets in the near term. 2. Crypto continues to see pockets of strong activity, but a broad-based altcoin season has yet to materialize. CoinMarketCap's (CMC) Altcoin Season Index stood at 54 as of the October 18 UTC daily observation, below the altcoin-season threshold of 75, while BTC dominance rose to 60.08%. Our proxy leverage ratio fluctuated between 4.00 and 4.07 during the week, showing no sustained increase and suggesting limited appetite for additional leverage. Meanwhile, as major exchanges expand access to traditional financial assets, the recent sell-off in AI-related equities could attract short-term speculative capital away from crypto. Such capital rotation could make it more difficult for a new altcoin season to take hold. 3. Papertrade's loss-to-mine model has generated significant interest across the crypto community. The protocol combines high-leverage derivatives trading with zero slippage and a mechanism that rewards trading losses with PAPER tokens. Across the eight complete UTC days from October 10 to 17, cumulative reported revenue reached approximately $56.08 million, including $51.90 million distributed to token holders. With growing participation from key opinion leaders (KOLs), Papertrade has reportedly ranked among the top three platforms by profitability in the broader market recently. Assets to watch: BTC, ETH, SOL, ARB, OP, SKHYNIX, SKHY, META, TSLA, LRCX, and SPCX. Key research priorities this week: Cash flow performance in technology earnings; the relative discount and holding costs of the two SK Hynix contracts; and U.S. initial jobless claims and PMI data. Weekly market data cover the period through October 16, while research information was verified through October 18. Observation periods are specified separately for each chart.

Bitget•2026/10/19 06:51