Cardano: ADA ecosystem grows in 2023
The Cardano (ADA) ecosystem grew solidly in the first three months of 2023 — here are a few reasons why.
The Cardano (ADA) ecosystem grew solidly in the first three months of 2023 — here are a few reasons why.
From on-chain data shows that Cardano grew faster in Q1 2023 than expected. Since January 1, ADA’s market cap has risen 54 percent from $8.6 billion to $13.2 billion. Because of this rise, Cardano moved in 2023 from 9th to 7th place on the list of the largest cryptocurrencies by market cap. At the time of writing, 1 ADA 0.37 dollars.
DeFi sector grows 194.9%
Total Value Locked (TVL), i.e., the total money in Cardano project smart contracts, rose in Q1 2023 by 194.9 percent from US$50.8 million to US$149.8 million. This rise was driven by established protocols like MinSwap, as well as newer ones like Liqwid Finance. Additionally the total value of all stablecoins in the Cardano ecosystem since January grew by 261 percent to more than $10 million. The stablecoin protocols IUSD and DJED were mainly responsible for this growth in Cardano’s TVL in Q1 2023.
This development for Cardano is notable. Compared to Ethereum and its layer-2 coins (ARB, OP), the ADA ecosystem remains relatively small. Ethereum’s TVL is currently $28.71 billion and the two largest L2 scaling solutions, Arbitrum and Optimism, have a combined TVL of about $2.9 billion.
Cardano development continues
Another positive development is the launch of Hydra. Hydra is Cardano’s first Layer-2 solution and the first in a series of scaling upgrades that are set to go live on the Cardano network in March.
Hydra aims to improve the network’s scalability and performance by moving transactions and smart contracts from the main blockchain to separate, parallel channels. These channels bundle multiple transactions, reducing network load on Cardano.
Cardano is the fifth-largest blockchain for NFTs
In Q1 2023, Cardano’s NFT sector saw daily transactions drop by 27%, according to Messari. Additionally, NFT trading volume on Cardano fell to $40.5 million vs the prior quarter. Even with this drop, Cardano remains the fifth-largest blockchain by NFT trading volume.
NFT sales on Cardano were concentrated on the NFT marketplace Jpg.store. It accounted for about 98 percent of total ADA NFT trading volume in Q1 2023, with SpaceBudz being the most popular ADA NFT collection on Cardano.
Conclusion
Cardano’s development often proceeds slower than ADA developers would like. The community prioritizes sustainability and stability over speed. This is evident from the fact that smart contracts were activated only in 2021 via the Alonzo hard fork, more than four years after the network launch. Despite these conditions, the blockchain project continues to expand its presence in the crypto space. In particular, the DeFi sector appears to be strengthening further.
