Hoskinson "Cardano Will Absorb Bitcoin Liquidity"...Forecasting a Shake-up in DeFi

▲ Charles Hoskinson, Cardano (ADA), Midnight (NIGHT)/ChatGPT Generated Image

Charles Hoskinson, founder of Cardano (ADA), has proposed a new financial strategy to significantly inject Bitcoin liquidity into the Cardano ecosystem by linking the privacy network Midnight with the Pogun project.

According to crypto media outlet U.Today on May 3 (local time), Hoskinson stated in recent discussions that Midnight is an essential component of Bitcoin (BTC) decentralized finance. Hoskinson commented, "Bitcoin users want privacy, and Cardano can handle a lot of the heavy lifting on the programming side." He explained that Midnight will act as a private coordination layer, creating an environment where Bitcoin holders can generate returns according to their desired conditions.

Hoskinson defined Pogun, a system that brings Bitcoin-based decentralized finance to Cardano, as a powerful synergy between Bitcoin, Cardano, and NIGHT. When an X (formerly Twitter) user asked why one should hold Cardano instead of Bitcoin, Hoskinson suggested that Cardano's utility would be enhanced. He replied, "Every single transaction requires Cardano. Bitcoin users will pay fees with Cardano, but they won't actually see it."

Pogun is activating a specific roadmap to provide Bitcoin liquidity and a credit engine. In Q2, non-margin credit markets are scheduled to be unveiled, and in Q3, yield decentralized applications will be introduced. Following this, in Q4, there are plans to build a trust-minimized Bitcoin bridge utilizing BitVM technology. Pogun's lending component is expected to be officially launched to the public during Q2.

Pogun, one of nine proposals submitted by Input Output Group, focuses on expanding Cardano's transaction processing capabilities and venturing into the Bitcoin decentralized finance space. In particular, Leios, a consensus algorithm upgrade, aims to increase throughput by 10 to 65 times, targeting over 1,000 transactions per second. Leios is scheduled to release a test version in June and complete its full deployment by the end of 2026.

This project aims to transform dormant Bitcoin into productive capital within the Cardano ecosystem. Bitcoin holders will have the opportunity to obtain loans or generate returns through Cardano without entrusting their assets to centralized intermediaries. Hoskinson emphasized that these technological advancements will dramatically increase the transaction processing capacity of the Cardano network while providing new value to Bitcoin users.

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