Cardano Developments & Updates — January 2024

by | Jan 6, 2024 | Altcoins, Crypto News, Opinion | 0 comments

The question on everyone’s mind: Can Cardano (ADA) hit a new all-time high in 2024?

With the asset picking up in recent months after dropping to a 2023 low of $0.25 in October, it surged to $0.66 on 14 December, bringing about renewed enthusiasm for the Ethereum competitor. 
 
Before getting too excited, we are still 6x from the asset’s ATH set over two years ago; more on this later.

Today, we will explore what’s in the works for the eighth-largest crypto asset by circulating market cap. I will also cover my thoughts about it returning above $3 per coin.

News, events and partnerships
 

Emurgo, one of the three key entities behind Cardano, released an eight-tweet thread outlining the major developments and events occurring in the ecosystem in 2024. Some of these include: 

  • The Chang Hard Fork, signalling an important step forward for governance (the Voltaire era). This is set to take place in the coming months 
  • Greater tokenisation on the base layer (Cardano blockchain)
  • More third-party dApp development on the network
  • Enhanced interoperability
  • New features on its Yoroi wallet, and more. 
     

The timing of these announcements is another strategic move. Promoting major upgrades and adding features to Cardano’s blockchain amid a bull market will help it gain much more traction than doing this during a bearish period. 
 
 Whether or not it is a coincidence, you be the judge. Then again, I know that Charles Hoskinson has spoken about not rushing things on Cardano, and many upgrades often take longer to deploy than initially planned; case in point: multiple Ethereum improvements.

Key Aspects of the Cardano Vasil Hard Fork
What benefits do they offer to Cardano‘s blockchain overall?medium.com

Lucas Macchiavelli, a Cardano Ambassador and community builder, provided this excellent visual summary of the expected network improvements and events going into 2024.

Source:

@Lucasmacchia2

via

@AltcoinDailyio

on

X (formerly Twitter)

As pointed out by @TheOCcrpytobro, this covers governance, whereas scaling improvements will make for even more protocol improvements in the coming years.

For context, we are currently at the tail end of the smart contracts (Goguen) era, gradually moving towards scaling (Basho) and governance (Voltaire) eras of the Cardano roadmap.

In regards to scaling, Hydra Heads (a.k.a. Hydra) will be one of the biggest upgrades to

Cardano in the coming years. It is the leading scaling solution being worked on at present for the network, with the major objective of processing one million transactions per second.

It sounds farfetched, but look at how far Cardano has come since its inception, let alone many altcoins and tokens over the past eight years.

This piece will give you a comprehensive rundown of what it entails.

Why Hydra Will Be a Game-Changer for Cardano
Aiming for the holy grail of any blockchain ecosystem.medium.com

Sebastien Guillemot, a lead developer at Cardano, recently announced plans for greater collaborations between Arbitrum, Cardano and Mina Protocol, which have experienced strong price growth over the past month.

Source:

Sebastien Guillemot

on

X (formerly Twitter)

Last month, the Cardano Foundation released a blog post publicising its partnerships with Petrobras, a Brazilian state-owned energy company. 
 
 The focus of this collab is that the CF will run workshops about blockchain education. Moreover, material from the Cardano Academy will be used for students at Petrobras University. 

 This is an excellent move to accelerate the adoption of crypto assets, let alone distributed ledger technology, through these educational programs. It is a big deal when you consider it involves working with a state-owned enterprise in South America’s largest economy (and most populated nation). 
 
 Having a program approved by a government entity could allow the CF to use these learning modules to educate staff across other companies — both public and private firms — in different sectors. 
 
 It will be even more promising for Cardano if they can continue their momentum across Africa, which still has enormous development potential to improve the lives of over 1.3 billion people across the continent. 
 
 Charles Hoskinson has repeatedly spoken about the major opportunities available for blockchain technology to revolutionise many systems in Africa — let alone much of the developing world, including: 

  • more efficiencies across supply chains
  • having access to microfinance that would not have been readily available otherwise
  • far cheaper remittances (costing cents vs several dollars) that can be settled in second, not days
  • a standardised system of verifying credentials
  • measures to ensure greater transparency to reduce the amount of corruption, which is often rife in the developing world. 
     
    IBM’s Benefits of Blockchains post provides a useful overview of these benefits. I also recommend this interview with Charles Hoskinson in 2021, spruiking Cardano’s vision in Africa. 

To play devil’s advocate, the idea of a blockchain-based decentralised identity system also has its share of detractors.
 
For example, Elizabeth M. Renieris from The Centre for International Governance Innovation (CIGI) doubts the merits of a blockchain-based digital identity in Ethiopia, raising her concerns about (potential) privacy and data protection issues. 
 
However, Hoskinson challenged any claims that Cardano aimed to develop a nationwide ID system. Rather, it is designed to manage student credentials through Ethiopia’s Ministry of Education.

Source:

Charles Hoskinson

on

X (formerly Twitter)

You can learn more about Emurgo’s work across the continent in the latest State of Web3.0 Report, produced by Emurgo Africa and PwC. 

Before moving on, a quick reference to a proposed partnership with Kraken. In November, Hoskinson posted a tweet directed at Jesse Powell, the founder and CEO of Kraken, linking a CoinDesk article covering Kraken’s search for a Layer-2 partner. 
 
Nothing has been confirmed, although this could change in the coming months. If this were to go ahead, it should lead to a significant price jump for ADA, as Kraken remains a major exchange in the US and worldwide.

Source:

Charles Hoskinson

on

X (formerly Twitter)

New all-time high for ADA in 2024?

If this were to happen in 2024, it would be more influenced by pumpamentals (yes, this term actually exists, and is relevant here). In simple terms, price increases would be market-driven rather than network upgrades, on-chain metrics, and utility, at least for the next year or two.

I say this for two key reasons:

1) There is immense competition in the Layer-1 (base-chain) realm. Cardano would need to overtake Ethereum, BNB Chain (BSC), Polygon, Solana and even Bitcoin in terms of total value locked (TVL) on its chain for a new all-time high to be attributed to on-chain metrics rather than the overall market and macroeconomic factors.

I have opted to display this in ADA (instead of USD) as this excludes increased TVL attributed to increases in the coin’s price, which, for the record, is up 74% for the past month. Source: DefiLlama

This leads me to the next point.

2) ADA hit its ATH of ~$3.10 in early September 2021, right before the Alonzo Hard Fork, signalling the beginning of smart contracts on Cardano.

So, the coin hit its peak before enabling smart-contract functionality and has yet to return to that level, let alone get anywhere near it.

Unless Cardano gets massive worldwide adoption in the coming months or somehow manages to get a potential Spot ETF (despite speculation, in reality, this is almost impossible unless there is clarity surrounding its status as a commodity or security), it will be a market-driven rally.

Cardano is a slow burn. Several articles have been written about the blockchain’s slow-and-steady approach to network upgrades and general improvements.

This can be both a blessing and a curse. It is wiser to adopt this approach in some ways, as rushed projects are often wrought with flaws.

Then again, in this industry, you’re damned if you do; you’re damned if you don’t.

Staking options and key stats

What are some of Cardano’s characteristics that make it stand out from most crypto projects in terms of staking? 

Focusing on its flexible and convenient staking options, it boasts the following:

  • The third-most staked altcoin with over $8.8 billion (₳23 billion) of delegated ADA, accounting for ~65% of its circulating market cap (supply)
  • Over 1,324 million stake addresses across 2,871 active pools.
  • No withholding periods, unlike Polkadot, Ethereum, Fantom and other networks. However, there are ways around this waiting period by using liquid staking derivatives (LSDs). Moreover, blockchains implement this waiting period for network stability.

Sources: Staking Rewards and Cardano PoolTool

  • ADA can be staked in various ways: Via hardware wallets (Ledger, Trezor and BitBox02), standalone non-custodial wallets (Daedalus, AdaLite and Yoroi), and some crypto exchanges (the least recommended option). Per the latter, listings on various markets help inject more liquidity into this coin, thus benefiting its holders.
  • A very low barrier of entry for ADA staking, which can be done for as little as two coins (about a dollar). Furthermore, there is no bonding (withholding) period, and you earn rewards in the native coin (ADA) as opposed to going via an LSD*.

*This is particularly the case for Ethereum, whereby you need 32 ETH for solo staking to bypass LSDs and earn rewards in native ETH rather than tokens pegged to its price.

To track other metrics and the general trends on Cardano’s network, I recommend visiting Essential Cardano for weekly development updates and related stats.

Source:

Essential Cardano

weekly development report.

ADA a security? To be, or not to be….

There’s been an ongoing debate in the US about whether or not ADA is a security.
 
We know that regulators (notably US SEC Chair Gary Gensler) are pushing to classify ADA as a security, thus imposing stricter rules on trading and using it within the USA.

This has stoked much fear in some people contemplating holding this digital asset, which is one major reason it has yet to get anywhere near its ATH.

We saw how the SEC vs Ripple Labs lawsuit adversely impacted XRP’s price in recent years. It is still far from its ATH set in January 2018, albeit slowly recovering since the US District Judge Analisa Torres’ verdict in July.
 
Due to this favourable outcome for XRP, I am banking on a favourable outcome for ADA holders, in that it won’t be labelled a security. 
 
Yet, I doubt The SEC under Gensler will back down, even though this loss (not to mention Grayscale’s victory against the regulator) is beginning to make his attacks on the crypto industry rather futile.

Quick side note: For anyone investing in an asset that could end up being a security, it is worth remembering this — If a security entity goes bankrupt, then:

“Investors who deposit funds or crypto assets with a crypto asset securities entity might cease to have legal ownership of those assets and might not be able to get those assets back when they want to.”

US SEC investor alert: March 23, 2023

Additional thoughts

Even though Cardano has remained a dominant (top-20) crypto since November 2017, there’s no guarantee it will remain prominent in this space for years to come.

No project stakeholder should rest on its laurels as a rival can come along and take away significant market share and, more importantly, a (once) loyal user base.

On this note, Cardano has a loyal fan base, sometimes referred to as Cardanians — a wanky term in this context, like Binancians, though I digress.

On the contrary, some people detest Cardano, let alone any chains and coins/tokens that run on proof of stake (PoS).

You know it’s become a major player in this space when it tends to polarise many Bitcoin/crypto enthusiasts, partly due to Charles Honkinson’s rants. Some find his direct approach refreshing, whereas others will see him as being too blunt and too adversarial towards rival projects.

Despite being a fan of Cardano (ADA), I would prioritise Bitcoin (BTC), Ethereum (ETH), and, to a lesser extent, XRP. I still hold roughly 60% of the maximum amount of ADA I’ve owned to date, and I plan to keep holding it for a while, cashing out some of it once we get into a fully-fledged bull run in the coming months.
 
 In conclusion, keep an eye on ADA’s performance throughout the year, remain informed about what is happening in the ecosystem and adjust your portfolio accordingly, whether this involves taking profits (in fiat or another crypto asset) or even selling at a local peak to then buy back in at a lower price.

Ways to stay in the loop with Cardano (ADA)

Additional resources

Disclaimers

• N.B. None of this is financial advice; I am not a financial advisor. You are ultimately responsible for crypto investments, let alone in any asset class.

• The opinions expressed within this piece are my own and might not reflect those behind any news outlet, person, organisation, or otherwise listed here.

• Please do your own research before investing in any crypto assets, staking, NFTs or other products affiliated with this space.

• For transparency, Cardano (ADA) represents about 15% of my crypto portfolio at the time of writing.

Featured image by Freepik

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