Charles Hoskinson Responds to Criticism of Cardano DeFi and ADA Holders

Cardano founder Charles Hoskinson has responded to renewed criticism about the network’s total value locked (TVL) and relatively sluggish decentralized finance (DeFi) growth.

On October 31, Hoskinson acknowledged the gap between Cardano’s DeFi activity and leading blockchains like Ethereum and Solana. However, he said the numbers fail to capture the network’s broader participation and governance strength.

Cardano Bets on Bitcoin Interoperability to Unlock Billions in DeFi Liquidity

Hoskinson pushed back on the long-standing belief that introducing major stablecoins such as USDT or USDC would automatically transform Cardano’s DeFi ecosystem.

“No one’s ever made the argument and explained how the existence of one of these larger stablecoins is magically going to make Cardano’s entire DeFi problem go away, make the price go up, 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 Cardano’s DeFi TVL remains small.

For context, he noted that the network has about 1.3 million users who stake or participate in governance, collectively holding more than $15 billion in ADA.

However, those figures don’t count toward TVL metrics, and most ADA holders remain passive participants rather than active liquidity providers.

“Cardano has a fertile ecosystem. There’s a lot of people floating around. There’s a lot of people who hold ADA, who have Cardano wallets, who have been in our ecosystem — in many cases more than five years. But not a lot of those people have crossed the chasm to use DeFi in Cardano,” he stated.

He added that this distinction creates a “chicken-and-egg” loop for Cardano’s ecosystem. According to Hoskinson, the network’s low activity deters partnerships and liquidity, while the lack of external integrations further limits on-chain adoption.

To counter these limitations, Hoskinson outlined a multi-year roadmap that ties DeFi 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, allowing ADA and BTC to be lent, converted into stablecoins, and used in real-world lending products.

Hoskinson expects this combination to drive “billions of dollars” in new liquidity while attracting Bitcoin’s vast capital base. He also cited ongoing projects such as Leios, as proof that Cardano continues to evolve at the protocol level.

Still, he conceded that Cardano’s core issue is coordination and accountability, not technology.

“It’s not a technology problem. It’s not a node problem. It’s not a problem of imagination and creativity. It’s not a problem of execution. We can pretty much do anything. It’s a problem of governance and coordination and ultimately accountability and responsibility,” Hoskinson said.

To fix this, he proposed delegating clear responsibility for ecosystem expansion. He also called for targeted marketing and event strategies to mobilize ADA holders toward DeFi participation.

“The problem isn’t the ability to do a marketing campaign. The problem isn’t our ability to ship great software. It’s that there’s no one accountable to actually conceive of it, execute it, and be held accountable to the outcome of it. That’s the problem in a nutshell. So that is the problem we have to solve next year as we look to 2026,” He stated.