**Key Takeaways**

What’s really holding Cardano back in DeFi? According to Charles Hoskinson, the main challenge is weak coordination and governance within the community. Despite having over 1.3 million active ADA users, most are not yet contributing to DeFi liquidity.

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### The Core Issue: Coordination, Not Technology

Hoskinson emphasized that Cardano’s technology is not the problem. Unlike Ethereum (ETH) or Solana (SOL), Cardano struggles with community coordination. This lack of synergy has resulted in a “chicken and egg” situation—low on-chain activity discourages liquidity providers and partners, which in turn suppresses DeFi growth.

He stated,
> “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.”

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### Cardano’s Plan to Break the DeFi Stagnation Loop

Instead of competing in the traditional Total Value Locked (TVL) race, Hoskinson is advocating a different approach—linking Cardano with Bitcoin (BTC) and integrating real-world lending. This strategy aims to attract new liquidity from outside the crypto space, effectively breaking Cardano’s current DeFi stagnation.

Two core pillars under this plan are:
– **Midnight:** A technology designed to bridge ADA and BTC.
– **RealFi:** A framework enabling real-world lending using ADA and BTC.

Hoskinson believes these innovations could unlock “billions of dollars” by allowing both ADA and BTC to be lent, converted into stablecoins, and utilized within real credit markets.

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### DeFi TVL and Development Momentum

As of now, Cardano’s DeFi Total Value Locked (TVL) stands at around $271 million, considerably less than Ethereum’s $85.5 billion and Solana’s $11.29 billion. On the surface, ADA appears far behind in DeFi adoption.

However, data from Santiment shows a different story. Cardano’s Development Activity index even surpassed that of Ethereum and Solana in late October, indicating strong and consistent momentum among builders.

This supports Hoskinson’s assertion that Cardano’s core problem is not demand but activation—turning its existing user base into active DeFi participants.

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### ADA Price and Market Momentum

At press time, ADA was trading near $0.60, exhibiting soft momentum. The price remained below all major exponential moving averages (EMAs):
– 20 EMA near $0.65
– 50 EMA around $0.71
– 200 EMA close to $0.74

This suggests that sellers still dominate the broader trend. The Relative Strength Index (RSI) reflected weak momentum, far from a bullish reversal zone. Additionally, the Chaikin Money Flow (CMF) indicator was slightly below zero, indicating that capital inflows had not yet resumed.

Overall, ADA appears stuck in a slow drift, showing no strong signs of buyers returning in the near term.

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**Conclusion**

Cardano’s challenge in DeFi does not stem from technology but from governance and coordination within its community. With over 1.3 million active users engaged in staking and governance, the potential is clearly there. By focusing on integration with Bitcoin and real-world lending through initiatives like Midnight and RealFi, Cardano aims to unlock significant liquidity and realize its DeFi ambitions.

Whether this strategy will reinvigorate ADA’s DeFi ecosystem and market momentum remains to be seen in the coming months.
https://bitcoinethereumnews.com/bitcoin/can-bitcoin-rescue-cardanos-defi-plans-hoskinson-bets-on/?utm_source=rss&utm_medium=rss&utm_campaign=can-bitcoin-rescue-cardanos-defi-plans-hoskinson-bets-on