As a project born in 2015, Cardano (ADA) has gone through several rounds of bull and bear in the crypto industry. But it wasn’t until September last year that it supported smart contract deployment for the first time, becoming a true DApp platform.
In the past six months, Cardano has been in the initial stage of ecological construction on the chain. According to data from DeFiLlama on March 23, the total locked value (TVL) of DeFi applications on the Cardano network exceeded $300 million, with the vast majority of TVL provided by two DEXs, indicating that the network is still in a relatively early stage of development.
Currently, TVL on the Cardano chain ranks 24th among all public chains, but its native token, ADA, ranks 7th in the crypto asset market capitalization rankings. This ranking is still the result of slipping. At the end of August last year, ADA once rushed to the third place in this list.
The huge contrast between the market value of the token and the ecological development has made ADA controversial. From the perspective of industry insiders, with the growth of the encrypted asset market, if ADA wants to maintain a high market value, it is bound to promote the value of the project itself, and it is particularly important to accelerate the ecological construction on the chain.
However, the current public chain sector is no longer a market with only a few public chains such as ETH, EOS and Tron. Cardano is still facing unprecedented competitive pressure on the way to “catch up” with its high market value.
TVL on Cardano chain exceeds $300 million DEX dominates
In the crypto asset industry, ADA's asset code is better known than the Cardano public chain it is attached to. As Cardano's on-chain native token, its market value has always been at the forefront of the crypto-asset market value rankings. In the public chain war, Cardano's on-chain ecological application was lackluster, and this contrast impressed its followers.
In the field of blockchain, Cardano is a solid "time-honored brand". It was established in 2015. Since its inception, it has prided itself as a third-generation blockchain platform, focusing on on-chain scalability, operability and sustainability. Related questions. Its core founder, Charles Hoskinson, is also well-known in the crypto circle. He is not only the co-founder of Ethereum, but also co-founded the first-generation decentralized exchange BitShares with EOS founder Daniel Larimer (flower name BM).
Such a blockchain supported by a star halo has always been particularly slow in the construction of on-chain applications. In 2021, when new public chains such as Solana and Avalanche made waves, Cardano finally supported the deployment of smart contracts for the first time through the Alonzo hard fork upgrade on September 13. At that time, the encryption market had turned from bullish to decline, and Cardano’s operation was considered by the outside world as “getting up early and catching up late”.
Recently, the ecology on the Cardano chain has improved. According to data from DeFiLlama on March 23, the total locked value (TVL) of DeFi applications on the Cardano network exceeded $300 million, a 24-hour increase of 6.76%.
In addition, Messari data shows that Cardano’s on-chain transaction volume reached $68.76 billion on the 23rd, surpassing the Bitcoin ($15.9 billion) and Ethereum ($36 billion) networks.
Cardano's single-day on-chain transaction volume hits $68.76 billion
The activity of the on-chain ecology has allowed Cardano to regain the attention of the outside world.
Judging from the application data on the Cardano chain included in DeFiLlama, it is still DEX-type protocols that currently provide the main TVL for its network. On March 23, the top three TVL applications on the Cardano chain were Minswap, SundaeSwap and MuesliSwap, with TVLs of $194 million, $112 million and $1.67 million respectively. Among them, the TVL of the first two accounts for more than 99% of the Cardano chain.
This data shows that Cardano is still in the early stage of development, and its TVL composition is similar to the early development of most public chains. It is first issued by DEX, and then various track applications are supplemented one after another.
It is worth noting that since the current mainstream crypto asset wallets such as Metamask do not yet support Cardano, users still have a certain operational threshold to access the public chain. According to users who have experienced DEX on Cardano, there will be lags during transactions, and the user experience still needs to be optimized.
The node pledge rate in ADA lock raising reached 71.64%
In any case, for Cardano, the launch of smart contracts and the initial construction of on-chain applications is a good start. Riding on the recent momentum, Cardano is currently ranked 24th on the TVL list of public chains, surpassing Kusama and EOS.
TVL on the Cardano chain ranks 24th in the public chain
According to its official blog announcement, Cardano also intends to increase transaction throughput this summer. This is mainly due to the significant increase in user activity caused by enabling smart contracts, and at the same time, the average transaction size has increased due to script transactions that carry code. On the one hand, this shows that there is a demand for on-chain interaction in this chain, and the increase in demand also exposes the insufficient ability of the chain to satisfy itself, which is the reason why users report that the application on the Cardano chain is stuck.
The researchers of the public chain believe that more applications are expected to be built on Cardano, and in order to keep up with this surge in demand, the current transaction throughput of the system must be increased.
Perhaps due to the increase in on-chain adoption, the market price of ADA has also risen recently. During the week from March 16th to 23rd, ADA rose from $0.8 to $0.97, an increase of 21.25%.
However, it should be noted that compared to before the launch of the smart contract, ADA’s market capitalization ranking has declined. Currently, ADA ranks 7th in the crypto-asset market value rankings, with a circulating market value of $32.665 billion. At the end of August last year, the market value of ADA once ranked third in the market value list, second only to BTC and ETH.
In the eyes of ADA followers, the decline in the ranking of ADA’s market value is due to the fact that the benefits of the launch of smart contracts have already landed, and the market hype has declined; The position is closer to the rational expectations of the market.
In fact, although ADA has long been in the top ten of the crypto asset market capitalization rankings, in the eyes of many insiders, it has always been a "wonderful" asset. This is mainly because it is always difficult for people to find the value support for the high market value of ADA.
During the 7-year development process, Cardano, which claims to be blockchain 3.0, did not launch smart contracts until last year, which was an unqualified performance in the eyes of investors. It is surprising enough that it ranks 7th in the market value of encrypted assets.
There has always been a voice in the community that this phenomenon of a large gap between market value and project development is related to the centralization of ADA tokens and the control of giant whales.
According to the data of Staking Rewards, ADA currently worth 23.8 billion US dollars is pledged in the Cardano network. Most of this pledge is used as the verification node of the PoS network. Its network pledge rate reaches 71.64%, which is ahead of many public chains. It shows that ADA has carried out a centralized lock-up, which controls the market circulation to a certain extent.
From the perspective of industry insiders, with the growth of the encrypted asset market, if ADA wants to maintain a high market value, it is not a long-term solution to lock up the funds. It is more important to accelerate the ecological construction on the chain, and the market supply of ADA is also required to promote ecological prosperity.
According to the future ecosystem layout announced by the Cardano community, project parties are deploying in multiple sectors such as lending, launchers, oracles, stablecoins, wallets, games, and NFTs. Among them, the NFT track is the most popular. Dozens of teams such as CNFT, BitBunny, and PunksterArt plan or have already developed projects in Cardano.
However, for Cardano, which is long overdue, it has to face the competitive pressure of multiple emerging public chains in the market. After all, the current market is no longer a market with only a few public chains such as ETH, EOS, and Tron. There is still a lot of uncertainty around Cardano's path to match its high market cap.
(Disclaimer: Readers are requested to strictly abide by local laws and regulations, this article does not represent any investment advice)
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