Sooner or later, something’s gotta give.
Even though it is still in the top 10, ADA has performed poorly — at least compared to BTC, ETH, BNB, and other major assets — down by nearly 85% since reaching its all-time high of $3.10 during the 2021 market-wide bull run. That’s almost 1,089 days and counting.
Many financial analysts are banking on the US Federal Reserve cutting interest rates next month, and Chair Jerome Powell’s latest comments reinforce these hopes. Following this news, ADA received an immediate, albeit modest, 4% increase over the past 24 hours and is up 18% weekly.
Could this be a major catalyst for ADA to return to its peak? Can Cardano stakeholders (particularly developers) do enough to ensure the blockchain’s long-term success?
Chang Hard Fork and the Voltaire Era
One of the most anticipated upgrades for Cardano is scheduled to occur in the coming weeks.
The Chang Hard Fork marks the beginning of the Voltaire Era, the final epoch of the Cardano Roadmap. This represents decentralised governance on Cardano’s blockchain, allowing ADA holders to vote on proposals to directly influence the network’s trajectory.
The idea of decentralised governance is a whole topic in itself, and I will cover it in the future as it becomes more relevant.
Chang is being deployed in two stages:
— Phase 1: The launch of the Interim Constitutional Committee (ICC)
— Phase 2: “Introducing Delegate Representatives (DReps) and voting by stake pool operators (SPOs).”
Check out the Twitter article below for further details from Emurgo, one of the three major entities behind Cardano.
— EMURGO (@emurgo_io) July 17, 2024
Cardano x Polkadot
Polkadot announced that Cardano will use Substrate, the basis of Polkadot’s software development kit (SDK), to create unique blockchains, enhance cross-chain interoperability, and access various Polkadot platforms and applications.
1/ Cardano will use Substrate, the foundation of the Polkadot SDK, to build out its “partner chain” project — showcasing Substrate's potential to expand across Web3, and its ease of use for other chains and ecosystems 🛠️
— Polkadot (@Polkadot) November 6, 2023
on
Charles Hoskinson, founder of Cardano, has spoken positively about Wood and Polkadot, including this quote:
“Polkadot is what Ethereum 2 should have been.”
Charles Hoskinson, 7 March 2021 AMA, 15’48”
Unsurprisingly, these two are working together as Charles Hoskinson is another Ethereum co-founder and is still on good terms with Wood, unlike Vitalik Buterin and Hoskinson.
Does Cardano still have a future?
In short, yes, but I am not as excited about it as I once was.
Do I still hold ADA? Yes, I still have most of what I was holding at its ATH three years ago.
The strong support other projects have had during bearish times — notably XRP, which has been heavily subdued by the recently concluded Ripple Labs vs. XRP lawsuit — makes me hopeful that many individuals will stick by Cardano for the foreseeable future.
Despite a prolonged period of price stagnation since the launch of smart contracts (i.e., the beginning of the Goguen Era), Cardano still has millions of followers across multiple social media platforms (see links below) and over $7.5 billion of ADA tokens staked in its protocol.
Moreover, according to Electric Capital data, its blockchain has maintained over 500 monthly active developers since February 2022, and the number is currently 635 (i.e., as of July 1). Of this, 217 are considered full-time developers, committing code for 10+ days per month.
Input Output Global (IOG), one of the three major entities behind the network, releases weekly development reports via its Essential Cardano site each week.
Based on the published data, version 0.18.0 of Hydra — Cardano’s much-anticipated layer-2 scaling solution — has now been released. In addition to node upgrades, the latest report of Project Horizons, dubbed “Cardano’s revolutionary innovation engine and one of the world’s most significant decentralized grant funds,” has also been released.
Having said this, we can’t rest on our laurels. Sooner or later, many will lose patience and abandon Cardano if the network doesn’t advance fast enough to match Ethereum, Solana, and other Layer 1s. The Open Network, i.e., Toncoin, further adds to this competition, with TON now having a higher circulating market cap than ADA.
Additional thoughts
Hopefully, we will hear about a significant network upgrade or series of major partnerships at the upcoming annual conference, Cardano Summit 2024. Over 10,000 attendees — including various stakeholders such as business directors, founders, developers and general Cardano/blockchain enthusiasts — from more than 25 countries are expected to attend this event.
This would help boost the hype and offer a bullish narrative at a time when many are expecting a massive pump for altcoins going into 2025.
Upgrades and improvements are important, but I will start doubting this project if Cardano doesn’t secure several major partnerships in the next three to four years (possibly sooner).
Ethereum has the Enterprise Ethereum Alliance (EEA), BNB is affiliated with the world’s largest crypto exchange, Binance, and Solana has garnered plenty of institutional interest (one example being a potential spot ETF on the horizon) and support from everyday investors as it sits above Cardano.
Even though the Cardano Blockchain Infrastructure Alliance exists, it lacks big names and has far fewer members than the EEA. For this reason, the blockchain needs to make significant strides to expand its global reach and get far more usage of its dApps and ADA in general.
Furthermore, it’s important to remember that cheaper fees and its proof-of-stake (PoS) system, Ouroboros, were distinct advantages over Ethereum once devs launched the Alonzo Hard Fork, ushering in smart contracts on Cardano in September 2021.
Since then, Ethereum has carried out The Merge (migrating it to a fully PoS blockchain, making it 99.99% more energy efficient than its previous Proof-of-Work algorithm), witnessed several L2s run on top of it and deployed Proto-Danksharding, which has increased scalability and significantly lowered transaction fees, without sacrificing decentralisation.
As a result, Cardano has fewer trump cards. This reinforces the need to innovate and keep up with the leading smart contracts platform before Ethereum or another L1 runs away with the lead, using the first-mover advantage as this blockchain tech matures and becomes mainstream.
Then again, in 1997, Apple was on the cusp of going bankrupt and look at where it is today.
Cardano’s far from this point, so I remain optimistic and believe it has a good team and committed community behind it.
As I wrap up, I’ve included an overview of the over 100 projects built on Cardano across multiple sectors (see link below), including the over-collateralised DJED stablecoin and its SHEN reserve coin as an alternative to USDT and USDC.
Regardless, like every other project in the space, it has had its fair share of detractors and will continue having them until it successfully deploys all of the expected upgrades.
Even then, there will still be people who will fight tooth and nail to bring down a rival project, especially when plenty of money and reputations are at stake; all hail the tribal nature of crypto.
P.S. I will cover the Midnight airdrop in a future piece.
Further reading/viewing
— The New Era for Cardano ADA with Charles Hoskinson — Thinking Crypto (Tony Edward) interview, published 12 June 2024.
— Cardano Chang Hard Fork Updates and Dates! — Cardano with Paul video, published 21 August 2024.
— Cardano Ecosystem infographic — Coin98 Analytics, and corresponding Reddit post.
Resources about the Extended Unspent Transaction Output (EUTXO) model on Cardano:
https://docs.cardano.org/learn/eutxo-explainer/
https://iohk.io/en/blog/posts/2021/03/11/cardanos-extended-utxo-accounting-model/
Ways to stay in the loop with Cardano and ADA
— Official website and ADA token
— Cardano docs, including its whitepaper
— Twitter/X
— Cardano forum in over 12 languages
— Reddit
— Telegram
— Discord
— Charles Hoskinson’s YouTube channel
— Creating and managing a stake pool
— Developer Portal and GitHub DP
— Cardano Foundation
— Cardano Foundation GitHub docs
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.
• Cardano (ADA) accounts for about 7% of my crypto portfolio at the time of writing.