Cardano News Today: Cardano’s DeFi Challenges: Lack of User Engagement and Issues in Governance

Cardano (ADA), once considered a strong competitor to

, is now facing a pivotal moment as its founder Charles Hoskinson addresses criticism regarding the platform’s underdeveloped decentralized finance (DeFi) sector. Despite having a total value locked (TVL) of only $262 million—placing it 24th worldwide—Hoskinson has shifted the conversation from technical limitations to user participation, asserting that investors are not embracing the platform’s DeFi offerings ( ). Compared to ($11.17 billion) and Ethereum ($84.22 billion), Cardano’s TVL is significantly lower, even though its 1.3 million stakers collectively hold $15 billion in ADA, as Hoskinson pointed out in a .

Hoskinson described the situation as a “chicken-and-egg” dilemma: minimal DeFi activity discourages new partnerships and liquidity, while limited external connections slow down on-chain growth, a point he reiterated in his Yahoo Finance interview. He rejected the idea that simply adding major stablecoins like

or would automatically drive expansion, noting that already features asset-backed stablecoins (USDM, USDA) with reliable pegs, as highlighted in a . Instead, he pointed to issues of governance and coordination within the ecosystem, stating, “The challenge isn’t technological. It’s about governance and collaboration.”

Hoskinson’s remarks have ignited discussion. Some community members believe that ADA holders lack sufficient motivation—such as attractive returns, user-friendly platforms, or strong security—to participate in DeFi, as reported by TheCryptoBasic. Others argue that Cardano’s robust governance, reflected in its 1.3 million active stakers, is a sign of a thriving network, according to a

. Hoskinson acknowledged both perspectives, noting that while staking is high, it does not equate to providing liquidity, and bridging this gap could potentially raise TVL to between $5 and $10 billion.

To tackle these issues, Cardano is following a long-term strategy focused on

compatibility and integrating with traditional finance. Initiatives such as Midnight (a privacy-oriented sidechain) and RealFi (a microfinance solution for Africa) are designed to unlock liquidity by allowing ADA and BTC to be lent, converted into stablecoins, and used in lending products, Hoskinson explained to Yahoo Finance. He also mentioned Leios, a protocol-level advancement, as proof of Cardano’s ongoing technical progress, as also noted by BeInCrypto.

The need for change is highlighted by falling on-chain activity. According to Bitcoinist, ADA’s daily active addresses dropped from over 32,000 in mid-October to 24,000 in early November, while the token’s price slipped below $0.57 amid a broader crypto downturn. Hoskinson clarified his previous statements, emphasizing that he was not “blaming the community” but rather pointing out a lack of participation. “I’m not holding any individual in the Cardano ecosystem responsible,” he stated.

Market experts remain cautious. With ADA currently trading at $0.5417—a 6.2% decrease in the past day—and the overall crypto market down 4%, Cardano faces mounting pressure to achieve concrete progress. Hoskinson’s plan relies on activating passive ADA holders through focused outreach and accountability, but as BeInCrypto has reported, the journey toward revitalizing Cardano’s DeFi sector is still filled with obstacles.