Charles Hoskinson, co-founder of Cardano, recently addressed growing concerns surrounding the apparent stagnation in the platform’s decentralized finance (DeFi) ecosystem. Contrary to reports suggesting he placed the blame on the Cardano community, Hoskinson firmly denied these claims, calling them a distortion of his original remarks. Speaking out on social media, Hoskinson criticized crypto media for misrepresenting his position, stating that he never accused users of being the cause behind ADA’s DeFi underperformance.
In a video posted on X (formerly Twitter), Hoskinson clarified that his comments were intended to shed light on structural imbalances within the Cardano ecosystem, not to target or blame its participants. He emphasized that his observations were analytical in nature, focusing on a significant gap between the number of users staking ADA and those actively engaging with DeFi protocols built on the platform.
Currently, over 1.3 million individuals are involved in ADA staking, showcasing strong participation in network governance and security. However, the number of users interacting with DeFi applications remains disproportionately low. This discrepancy, Hoskinson explained, is a major factor in why Cardano’s total value locked (TVL) lags behind other blockchain networks. He estimated that with proportional DeFi adoption, Cardano could see a TVL ranging between $5 billion and $10 billion.
Hoskinson made it clear that the issue is not rooted in a lack of interest or activity within the community but rather in user behavior patterns and the underdevelopment of certain segments of the ecosystem. He pointed out that despite the healthy staking metrics, the absence of significant DeFi engagement reflects a broader challenge in attracting users to participate in financial protocols beyond holding or staking ADA.
He also rejected the narrative that the Cardano ecosystem only has between 10,000 and 50,000 active users, citing the extensive staking participation as evidence of a much larger and engaged user base. The real question, according to Hoskinson, is why such a large portion of users are not also contributing liquidity or utilizing DeFi services.
Several factors may be contributing to this imbalance. Hoskinson mentioned potential barriers such as user interface complexity, lack of intuitive design, slippage concerns, transaction fees, limited financial incentives, and a general lack of education about DeFi use cases and risks. These hurdles may be discouraging users from venturing beyond staking into more complex DeFi interactions.
Meanwhile, on-chain activity has seen a noticeable decline. Daily active addresses on the Cardano network fell from over 32,000 in mid-October to approximately 24,000 in early November. DeFiLlama data ranks Cardano 26th in terms of TVL, with around $243.2 million spread across 60 protocols. At the time of writing, ADA is trading at $0.5417, reflecting a 6.2% drop over the previous 24 hours. However, this decline is part of a broader market trend, with the overall crypto sector experiencing a 4% dip in the same period.
Hoskinson’s comments reflect a broader concern about the disparity between Cardano’s technological potential and its current DeFi adoption. Cardano has long been touted as a high-performance blockchain with a research-driven development approach, yet its DeFi ecosystem remains underutilized compared to networks like Ethereum, Solana, or Avalanche.
To address this, the Cardano team and its associated projects may need to invest more heavily in user education, improved DeFi infrastructure, and incentive mechanisms that reward participation. Simplifying onboarding processes, improving wallet integrations, and enhancing cross-chain compatibility could also help attract more users into the DeFi space.
Furthermore, the upcoming developments in the Cardano roadmap, including the introduction of new governance models, smart contract upgrades, and enhanced scalability solutions through Hydra and Mithril, could catalyze a new wave of DeFi innovation. These improvements may help bridge the gap between staking and DeFi usage by offering more efficient, secure, and rewarding user experiences.
Institutional interest in Cardano is also on the rise, with increasing capital inflows indicating long-term confidence in the network’s fundamentals. If Cardano can successfully align its community’s enthusiasm for staking with active DeFi participation, the blockchain could unlock a new phase of growth and relevance in the decentralized finance arena.
In summary, while the recent headlines may have painted a misleading picture of Hoskinson’s stance, his actual message was one of analysis and constructive critique. The focus, he argues, should be on understanding and addressing the root causes of Cardano’s DeFi underperformance—not assigning blame, but fostering solutions. As the ecosystem evolves, the key to unlocking its full potential may lie in bridging the behavioral gap between staking and DeFi, thereby transforming passive holders into active participants in the decentralized economy.