Cardano (ADA) founder Charles Hoskinson said that the decentralized finance (DeFi) sector stays structurally undervalued, arguing that activity on Cardano-based decentralized exchanges (DEXes) could surge once missing infrastructure components are in place.
Hoskinson made the remarks while responding to on-chain data shared by a Cardano stake pool operator that highlighted recent trading activity in NIGHT, the native token of the privacy-focused Midnight sidechain. The exchange between the 2 focused on the gap between centralized exchange volumes and decentralized trading on Cardano.
According to Cardano founder, infrastructure limits the scope of DeFi
According to the information mentioned, NIGHT recorded a day by day trading volume on centralized exchanges of around $4.2 billion within the last session. In contrast, trading on Cardano’s decentralized platforms amounted to around $4.3 million, in accordance with data from DEX Screener.
Source: X
Although modest in absolute terms, NIGHT was still probably the most actively traded token on Cardano DEXes in the course of the reporting period. The closest asset, SNEK, recorded a decentralized trading volume of roughly $306,560, demonstrating the limited liquidity currently available across the Cardano DeFi ecosystem.
The disparity reflects patterns observed during Midnight's recent launch, when NIGHT debuted on multiple centralized platforms – including Binance's Alpha environment – while on-chain activity lagged exchange-driven volume.
Reacting to the figures, Hoskinson said the inequality reflected infrastructure constraints somewhat than a scarcity of demand. He reiterated that Cardano's DeFi ecosystem still lacks two crucial components: a widely used, reliable stablecoin and mature cross-chain bridges.
Without reliable stablecoins, Hoskinson said, traders would struggle to take care of value on-chain or manage risk effectively. He added that advanced trading strategies remain difficult to implement on Cardano decentralized exchanges.
Hoskinson also noted the dearth of strong cross-chain bridges. He said this limits capital inflows from larger ecosystems comparable to Ethereum and Solana. As a result, Cardano’s DeFi markets remain relatively isolated.
With this in mind, Hoskinson said that decentralized exchange volume on Cardano could increase significantly because the infrastructure improves. He linked this potential growth to wider adoption of stablecoins and higher cross-chain connectivity. Hoskinson suggested that volumes could increase 100-fold under these conditions. However, he didn’t provide a timeline or specific benchmarks for this growth.
Hoskinson characterised the present environment as an early or accumulation phase during which activity stays subdued while basic infrastructure continues to develop. He framed his comments as a long-term view of DeFi capability somewhat than a short-term market forecast.
The comments come as Cardano continues to achieve visibility in institutional products, particularly through its inclusion in several crypto exchange-traded index products, despite not having a standalone ADA spot ETF.
This contrast – institutional commitment on the one hand, limited DeFi liquidity on the opposite – shows the discrepancy mentioned by Hoskinson. While Cardano's network and ecosystem tokens have gotten more visible in broader markets, on-chain trading activity has yet to scale at the identical pace.
