Charles Hoskinson steps up to clarify his statements on Cardano's DeFi ecosystem. Amid media accusations and on-chain data, the co-founder highlights a major structural issue hindering the adoption of decentralized protocols on ADA. With prices below $0.57, community participation becomes a central concern.
In a video published on X, Charles Hoskinson describes media coverage as “fundamentally dishonest.” The Cardano co-founder vehemently rejects the notion that he criticized his community for the network’s DeFi challenges. His position rests on a factual observation: More than 1.3 million users actively stake their ADA, while participation in DeFi protocols remains marginal.
This asymmetry explains why Cardano’s total value locked (TVL) caps at approximately $243.2 million, according to DeFiLlama, positioning the network only in 26th place. Hoskinson calculates that if the engagement rate were equivalent between staking and DeFi, the TVL could range between $5 and $10 billion. This represents considerable untapped potential.
The founder insists: “There isn’t a single person in the Cardano ecosystem that I blame for our DeFi situation.” His analysis aims to understand behavioral mechanisms, not assign blame. This nuance distinguishes the analytical approach of a blockchain developer from media simplification that transforms observation into accusation.
Hoskinson deepens his diagnosis by emphasizing that Cardano has a solid user base, contradicting pessimistic estimates suggesting only 10,000 to 50,000 active participants. The strong staking participation demonstrates community engagement and confidence in the Ouroboros consensus protocol.
The challenge lies in the barriers to entry for DeFi on Cardano. Several technical and ergonomic factors may explain this hesitancy: Slippage on decentralized exchanges, transaction fees, sometimes complex user experience, yields deemed insufficient compared to other chains, and an educational deficit regarding available DeFi opportunities.
On-chain data confirms this concerning trend. The number of daily active addresses has fallen from over 32,000 in mid-October to approximately 24,000 in early November, signaling a slowdown in network activity. This decline in engagement occurs in a challenging market context, with the entire crypto sector losing 4% over 24 hours.
Cardano’s low TVL starkly contrasts with its initial ambitions. Distributed across 60 protocols, this fragmented liquidity limits the network effect and makes DeFi applications less attractive. Traders naturally seek market depth and volume, two elements currently lacking on ADA.
Competing platforms like Ethereum, Solana, or Avalanche benefit from much more developed DeFi ecosystems, creating a virtuous circle of adoption. As TVL increases, applications become more efficient, attracting more users and capital. Cardano must reverse this dynamic to compete effectively.
The current correction of ADA price to $0.5417 partially reflects these structural concerns. While the global market explains part of the bearish movement, Cardano’s relative underperformance compared to certain competitors suggests specific concerns. Investors closely monitor DeFi adoption metrics as leading indicators of the future relevance of the network.
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