Cardano, once hailed as a blockchain with immense potential, is facing a critical challenge in the decentralized finance (DeFi) space. The issue isn’t technological—Cardano’s infrastructure is robust—but rather a lack of community coordination and governance, which has left liquidity “trapped” within its ecosystem.
Charles Hoskinson, the founder of Cardano, has been candid about this problem. While Cardano’s technology is more than capable of supporting advanced DeFi applications, its community hasn’t yet been able to mobilize effectively like Ethereum or Solana. Hoskinson believes that integrating Bitcoin and implementing RealFi—practical, real-world lending—could be the turning point that frees Cardano from its current DeFi stagnation.
The DeFi Problem on Cardano
Currently, Cardano boasts over 1.3 million active users, yet the majority remain disengaged from DeFi activities. This creates a “chicken-and-egg” scenario: low liquidity discourages external partners and capital inflow, while insufficient participation prevents the ecosystem from reaching the critical mass needed for robust growth.
“This is not a technology problem. It’s not about nodes or the ability to innovate. We can do everything—we just lack governance, coordination, and accountability.”
— Charles Hoskinson, Founder of Cardano
Hoskinson stresses that the challenge lies not in technical capability but in operational structure and community engagement. Despite a strong foundation, Cardano hasn’t yet generated the “liquidity flywheel” seen in ecosystems like Ethereum or Solana, where user participation drives consistent growth in DeFi.
Hoskinson’s Strategic Solution
Cardano is focusing on two key initiatives: Midnight and RealFi. These projects aim to connect ADA with Bitcoin and real-world lending platforms, creating avenues for external capital to flow into the Cardano ecosystem.
“When ADA and BTC can be lent, converted into stablecoins, and used in real-world credit markets, we can unlock billions of dollars in liquidity.”
— Charles Hoskinson, AMA, October 2025
This approach indicates that Cardano is prioritizing sustainable, real-world value creation over short-term gains like yield farming. By linking blockchain assets to practical financial applications, Cardano hopes to differentiate itself from other chains focused primarily on TVL (total value locked) competition.
TVL Remains Low, But Development Activity Strong
According to DeFiLlama, Cardano’s TVL currently stands at $271 million, a fraction of Ethereum’s $85.5 billion and Solana’s $11.29 billion. Yet development metrics from Santiment indicate that Cardano’s development activity has outpaced both ETH and SOL as of late October 2025.
This contrast shows that Cardano is far from stagnant in terms of innovation and infrastructure, but it struggles to activate its existing user base. The network continues to expand in terms of underlying applications and ecosystem development, signaling long-term recovery potential.
ADA Price Performance Remains Weak
As of the latest data, ADA trades around $0.60, below its major exponential moving averages (EMAs):
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20 EMA: $0.65
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50 EMA: $0.71
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200 EMA: $0.74
Technical indicators from TradingView suggest that sellers still dominate the market. The RSI has yet to reach bullish reversal territory, and the Chaikin Money Flow (CMF) remains slightly negative, indicating that capital has not returned to the market. ADA continues to move sideways, reflecting cautious investor sentiment.
Breaking the DeFi Stalemate
For Cardano to overcome its DeFi challenges, it must activate its 1.3 million existing users, transforming them into active liquidity providers. Combining ADA with major assets like Bitcoin and implementing RealFi products could pave the way for a new influx of external capital.
If successful, Cardano could transition from a “build but underutilized” ecosystem to one that actively drives real-world usage, setting the stage for sustainable growth in the global DeFi market.
FAQs
1. Why has Cardano lagged in DeFi adoption?
Despite having over 1.3 million active users, the community has not yet coordinated to provide meaningful liquidity, slowing ecosystem growth.
2. How will Cardano address this problem?
Through the Midnight and RealFi initiatives, Cardano aims to integrate ADA with Bitcoin and real-world lending platforms, attracting new capital.
3. What is Cardano’s current TVL?
Approximately $271 million, far below Ethereum and Solana, but development activity remains strong.
4. Is ADA showing signs of price recovery?
Not yet. ADA remains below key EMAs, and capital flow indicators suggest investor caution.
5. What could put Cardano back on the DeFi growth track?
Activating existing users and attracting external capital through RealFi and Bitcoin integration could unlock significant liquidity and set the stage for sustainable ecosystem growth.
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