Cardano’s $19M DeFi Plan Faces a Hard Reality Check

In her latest video, Linda examines the PRIME proposal from Alpha Growth, which aims to deepen Cardano’s liquidity, improve DeFi products and attract capital that remains after reward campaigns fade. The stakes are notable: Cardano currently has about $90 million in DeFi TVL and $45 million in stablecoins, according to figures cited in the video.

Alpha Growth proposes an initial audit of Cardano DeFi across 20 to 25 categories, followed by a public gap analysis and, only then, incentive spending and capital deployment.

The final phase depends on approval from an operating group including representatives of Blink Labs, CoinseLion, Midgard Labs, Input Output and Tweag.

That safeguard matters. Linda noted that if the group does not approve the third phase, around 90 million ADA would not leave the treasury. “I personally really, really like that safeguard,” she said.

The preliminary budget includes $5.6 million for ecosystem grants, $4.3 million for liquidity-provider incentives and $2.4 million for marketing, events, content and distribution partnerships. Alpha Growth would also receive a $1.7 million fixed fee and up to $4.6 million tied to performance, with remaining funds allocated to audits and legal compliance.

Before the plan can proceed, however, Cardano governance may need to increase its Net Change Limit—the amount treasury can release during a funding period—from 350 million ADA to 500 million ADA. Linda said the existing limit leaves insufficient room for the proposal.

Alpha Growth identifies fragmented, inefficient and insufficient liquidity as Cardano’s core DeFi problems. Its thesis is that stronger “organic APR”—fees generated by real usage rather than subsidies—could make liquidity durable.

Linda is less convinced that competitive yields will bring users. She argued that Cardano has already offered high-APR, relatively low-risk opportunities without generating broad DeFi participation. In her view, the chain needs more than matching incentives available on Solana, Base, Arbitrum or Hyperliquid.

“We don’t just need competitive APRs,” she said. “We need something that only exists on Cardano”—a genuine killer application compelling enough to offset the friction of new wallets, bridges and unfamiliar protocols.

She also flagged the absence of native USDC, noting that Cardano’s bridged USDCX may lack the trust, liquidity and integrations many DeFi users expect. Settlement speed, liquidation responsiveness and Cardano’s wider reputation remain additional barriers.

For investors, PRIME is less a guaranteed TVL-growth engine than a controlled test of whether Cardano can build a sustainable DeFi market.

If it fails to move usage materially, Linda suggested the ecosystem may need to focus more decisively on real-world financial infrastructure—the direction Cardano was originally designed to pursue—rather than trying to outpace established DeFi hubs.

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