Cardano, one of the most innovative blockchain networks in the crypto space, is facing a new kind of problem — not technical failure, but human coordination. Despite years of development and a reputation for stability, the network continues to struggle in decentralized finance (DeFi). Founder Charles Hoskinson believes the issue lies not in Cardano’s technology, but in its users’ lack of engagement.
The Real Problem: Coordination, Not Code
In a recent discussion, Charles Hoskinson made it clear that Cardano’s DeFi challenges are not rooted in technological shortcomings. “It’s not a technology problem. It’s not a node problem. It’s not a problem of imagination or execution,” he said. “We can pretty much do anything. It’s a problem of governance and coordination.”
In simple terms, Hoskinson argues that while Cardano’s infrastructure is robust, the community isn’t using it effectively. The network has more than 1.3 million active users, but very few are engaging with DeFi protocols. This lack of activity creates a “chicken-and-egg” scenario: low participation keeps liquidity away, and the absence of liquidity discourages new users from participating.
Unlike Ethereum or Solana — where DeFi has become a thriving ecosystem with billions in total value locked (TVL) — Cardano’s on-chain financial activity remains subdued. For a network that prides itself on academic rigor and technical innovation, this stagnation is more a cultural than a coding problem.
Cardano’s TVL: Small Numbers, Big Potential
Cardano’s total value locked currently hovers around $271 million, a fraction of what other leading DeFi ecosystems hold. Ethereum leads with roughly $85 billion, while Solana sits around $11 billion. These numbers highlight the scale of Cardano’s DeFi gap.
Yet the low TVL doesn’t mean developers have abandoned the network. In fact, Cardano continues to rank among the top blockchains for development activity. Data from Santiment shows that Cardano’s GitHub commits recently surpassed those of both Ethereum and Solana — proof that builders are still laying the groundwork for a bigger future.
The question then becomes: if the developers are active, why aren’t users following?
Bridging the Gap: Bitcoin and RealFi
Hoskinson’s new plan to address the DeFi stagnation involves expanding Cardano’s scope beyond its ecosystem. Two major initiatives — Midnight and RealFi — are central to this strategy. Midnight is designed to enhance privacy and regulatory compliance, while RealFi aims to connect Cardano to real-world lending markets and traditional finance.
The long-term vision is to link Cardano liquidity with Bitcoin and even fiat-based credit systems. This could create a new financial bridge where ADA, BTC, and stablecoins flow seamlessly across chains. By tapping into Bitcoin’s massive liquidity and linking it to decentralized credit markets, Cardano could draw in new capital and drive real-world adoption.
If successful, this approach might transform Cardano from a passive staking network into an active financial hub. Hoskinson believes that if users fully embrace these systems, Cardano’s TVL should be between $5 billion and $10 billion — far above its current level.
The User Dilemma
Hoskinson’s frustration stems from the gap between Cardano’s potential and its actual use. The community has proven loyal and deeply engaged in governance and staking. However, when it comes to using DeFi platforms — lending, borrowing, or trading — the participation rate is surprisingly low.
This might be due to multiple factors:
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Complex interfaces: Some users find DeFi apps on Cardano less intuitive than those on Ethereum or Solana.
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Security concerns: DeFi exploits in other ecosystems have made some users hesitant to risk their assets.
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Yield competition: Cardano’s DeFi returns have been modest compared to high-yield protocols elsewhere.
To overcome these issues, the network must focus on improving user experience, enhancing liquidity incentives, and promoting education around its DeFi tools.
Technical Strength Remains Intact
From a technical standpoint, Cardano remains among the most secure and scalable blockchains. Its layer-1 infrastructure, built on Haskell and the Ouroboros consensus protocol, offers a balance between efficiency and decentralization that few other chains can match.
The upcoming developments in sidechains, Hydra scaling, and RealFi integration could give Cardano the tools to support larger liquidity flows. But these technical advancements will only matter if users begin to engage meaningfully with the ecosystem.
ADA’s Market Outlook
As of early November 2025, ADA trades around $0.60, well below its previous highs. The token remains under pressure, with major exponential moving averages (EMAs) — 20, 50, and 200 — all sitting above the current price. The RSI is neutral to weak, showing limited bullish momentum, and the Chaikin Money Flow (CMF) indicates that capital inflows are still subdued.
ADA’s stagnation reflects the same issue Hoskinson has been addressing: the fundamentals are strong, but market participation remains shallow. Until liquidity and trading volume pick up across Cardano’s DeFi landscape, ADA’s recovery may stay limited.
The Road Ahead
Cardano’s future in DeFi depends on one key shift — from passive holding to active participation. The network already has the technological edge, developer commitment, and a vast community. What it needs now is user activation.
If Hoskinson’s plan to link Cardano’s DeFi with Bitcoin and real-world credit systems succeeds, it could be the catalyst for a long-awaited revival. A coordinated ecosystem, backed by growing liquidity and real-world relevance, could finally push Cardano toward the $5–$10 billion TVL milestone he envisions.
Until then, Cardano remains a paradox: a network with immense potential and solid infrastructure, yet still waiting for its DeFi moment to arrive.
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