What’s With Cardano These Days?

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  1. The Positive
  2. The Negative
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Photo by AnTa_ranga from Pixabay

The crypto market seems to be in a never-ending bloodbath.

Almost every crypto is at least 50% below its all-time high. Frankly, I don’t even want to look at my portfolio. From how things look today, we might be entering into a crypto winter.

To make things worse, Cardano has been in a steady downtrend even before the whole space crashed.

It doesn’t look good but you might’ve heard what people say: fortunes are made in bear markets.

With that in mind, Cardano might be worth your while (and money) in the long run. Here’s why.

A quick recap for those new to Cardano

Cardano was founded by Ethereum co-founder, Charles Hoskinson, back in 2015 and launched its mainnet in 2017.

It was built by two software companies, Input Output and Emurgo, and its development runs through the Cardano Foundation.

It uses a proof of stake mechanism (called Ouroboros) and its blockchain can process 250 transactions per second for simple transactions and around 7 for smart contract transactions.

Its validator nodes (their 3,000 staking pools) secure the network, which makes it one of the most decentralized crypto projects out there.

Cardano has 72 decentralized applications already working and over 4 million native assets (mostly NFTs) and some belonging to these apps.

Despite 67% of Cardano holders being in red, they’re still not selling. And the fact that it’s one of the most adopted cryptos today, with over 3 million unique Cardano wallets, it looks like the community has still got diamond hands.

The good and the bad

Here’s a brief look at Cardano stuff.

The Positive

According to a study by on-chain data platform Santiment, Cardano had the most development activity of all blockchains last year. This analysis was based on the public repositories on GitHub, giving Cardano a slight lead over projects like Kusama and Polkadot. Ethereum ended up in 4th place, FYI.

This is an excellent sign for the long-term growth of Cardano so don’t worry if it doesn’t immediately translate into an increase in price.

Plus, the whole space is in a downtrend and wrapped in fear. So you know, be patient.

Cardano’s scaling solution Hydra should be a game-changing upgrade. From its current 250 transactions per second (tps), Cardano will be able to process 1 million tps!

Now, don’t get your hopes up yet, this might take a while. However, Cardano has already increased its block size by 12.5%, allowing more transactions per single block and thus more tps.

The Negative

Let’s start with the launch of SundaeSwap, the first decentralized app to deploy on Cardano back in January of this year.

With thousands of users wanting to try out the first DEX to use Cardano’s smart contracts, this inflow overwhelmed the Cardano blockchain. Failed transactions, platform errors, and frustrated users started piling up. The congestion was too much to handle.

However, the majority of crypto projects tend to have a rough start. Take for instance Solana and its several network crashes this year.

And if you think about it, despite all SundaeSwap’s issues at least the Cardano blockchain didn’t crash.

Pricewise, we’ve seen a steady decline for ADA since last September when the team introduced the long-awaited smart contract functionality. On top of that, ADA’s supply has increased by around 240 million since January and it will continue to be inflationary for several more decades.

Cardano’s Updates

According to Cardano’s roadmap, we’ve moved from the 3rd era (Goguen) devoted to the smart contract deployment, to the 4th era (Basho) focused on scalability.

Now, this evolution doesn’t follow a straight line so luckily the 4th and 5th eras have already been in the works for almost a year. For instance, this year we should see the launch of Hydra and Pipelining, two scaling solutions that should significantly improve the Cardano blockchain.

The team will also be working on other improvements such as further increasing the blocksize for transactions, optimizing the system to hold many more deFi apps on its blockchain, adding a new hot wallet, and including a Dapp store, among others. Many of these improvements will be delivered at the Vasil Hard Fork Combinator event at the end of June.

There’s an ambitious plan in motion but we’ll have to see if they can deliver on time.

Views on Cardano’s future

Cardano started last year at $0.31 (January 14th, 2021). With all that’s going on, it might crash to these levels again so don’t panic.

In the last couple of weeks, 12 new addresses have accumulated over 10 million ADA and whale’s control over the total supply is at almost 47%. You might ask yourself if this could lead to a dump given the market’s current situation.

If we look at it from another perspective, we might think that it’s just an accumulation phase. If Cardano is at a 75% loss of its all-time high but there is still a 74% supply staked, you could say that the community still looks very strong.

If you had to sell ADA now, why not wait until the launch of some of their most promising projects?

Are you still thinking about selling?

The Takeaway

Indeed, Cardano has not been looking good for half a year, but sometimes a short view prevents us from seeing the big picture.

There’s a lot of activity and growth behind the curtains and I’m confident this will result in a valuable long-term development. We just need to hold on (for dear life) while slowly everything starts getting on track again.

We know that the whole space depends on Bitcoin and until we don’t see a clear uptrend from big daddy, we shouldn’t expect miracles from the altcoins.

What’s your take on Cardano?

This article is for informational purposes only, it should not be considered financial advice. Consult a financial professional before making any major financial decisions.

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