Cardano founder Charles Hoskinson has responded to renewed criticism over the network’s total value locked (TVL) and the relatively slow growth of decentralized finance (DeFi).
On October 31, Hoskinson acknowledged the gap between Cardano’s DeFi activity and major blockchains like Ethereum and Solana. However, he said these figures fail to capture the network’s broader participation and governance strength.
Hoskinson pushed back against the long-held belief that the introduction of major stablecoins such as USDT or USDC would automatically transform Cardano’s DeFi ecosystem.
“No one has ever made the argument and explained how the existence of one of these larger stablecoins is going to magically make the whole DeFi problem out of Cardano, drive up the price, massively improve our MAUs, our TVL and all these other things,” he said.
He argued that their arrival alone would not solve the network’s structural challenges or guarantee growth.
According to him, Cardano already has native asset-backed stablecoins like USDM and USDA that can be minted at will and rarely lose their peg.
Instead, Hoskinson pointed to user behavior as the main reason why Cardano’s DeFi TVL remains small.
For context, he noted that the network has approximately 1.3 million users who participate in governance, collectively holding more than $15 billion in ADA.
However, these figures are not taken into account in TVL measurements, and most ADA holders remain passive participants rather than active liquidity providers.
“Cardano has a fertile ecosystem. There are a lot of people going around. There are a lot of people who hold ADA, who have Cardano wallets, who have been in our ecosystem – in many cases for more than five years. But few of those people have crossed the chasm to use DeFi in Cardano,” he said.
He added that this distinction creates a “chicken and egg” loop for the Cardano ecosystem. According to Hoskinson, low network activity discourages partnerships and liquidity, while the lack of external integrations further limits on-chain adoption.
To counter these limitations, Hoskinson laid out a multi-year roadmap that ties DeFi’s growth to real-world finance and Bitcoin interoperability.
He highlighted the Midnight Network – a privacy-focused sidechain – and RealFi, a microfinance platform targeting African markets, as key initiatives.
Both will integrate with Bitcoin DeFi, making it possible to lend ADA and BTC, convert them to stablecoins, and use them in real-world lending products.
