Cardano Up 477% This Year. What’s All The Hype About?
ADA, the native cryptocurrency of the Cardano blockchain, has surged in the past two weeks, 269% in the last month, and 2,633% since last year. With all that upward momentum, it’s managed to become the “best of the rest” cryptocurrency by market capitalisation behind Bitcoin and Ethereum.
So, what is Cardano (ADA)?
In Cardano’s own words, “Cardano is a proof-of-stake blockchain platform: the first to be founded on peer-reviewed research and developed through evidence-based methods. It combines pioneering technologies to provide unparalleled security and sustainability to decentralized applications, systems, and societies. With a leading team of engineers, Cardano exists to redistribute power from unaccountable structures to the margins – to individuals – and be an enabling force for positive change and progress.”
Cardano is a proof-of-stake blockchain. PoS systems allow miners to mine or validate block transactions based on the amounts they hold. The Cardano network will allow users to create tokens that run on Cardano natively, just as ADA does. This is what ETH 2.0 is aiming to do, among other upgrades too.
Apart from Dogecoin, the price of which was helped upward by Elon Musk tweets, Cardano is the best-performing crypto asset in the top 20 this year.
There are likely two primary reasons for such an incredible price gain: the “Mary” hard fork and fresh news of institutional interest.
The hard for of the network was completed this week. With the “Mary” hard fork, Cardano will become a decentralized, multi-asset (MA) smart contract platform – effectively an “Ethereum killer”.
That means that smart contracts, DeFi, and NFTs are all are possible on the network. That may not seem like a huge deal given that Ethereum already has all those things, but have you seen how out of hand the Ethereum gas fees have become? At the worst of time, we have seen Ethereum fees as high as 500 gwei. ETH 2.0 couldn’t come any quicker…
But what will this look like in practice? In short, it means that you will begin to notice new assets being exchanged on the Cardano blockchain. Like ERC-20 tokens that can be created and transacted on the Ethereum network, native tokens will open up similar functionality for Cardano — albeit with some fundamental differences and improvements.
Yet blockchain projects get upgrades and integrations and new features all the time. There’s no solid evidence that individual investors are pricing that into their decision-making while ignoring developments on other networks—although Cardano is getting ready to introduce NFTs at a time when they’re getting mainstream media attention. Along with a network upgrade that enables many of the same features as Ethereum does while ETH gas fees are through the roof, it’s great timing.
A second factor that could be driving the price up is this week’s news that FD7, a Dubai investment firm, sold $750 million in Bitcoin so it could buy ADA and Polkadot.
Gerald Votta, communications director at investment research firm Quantum Economics, told Decrypt, “Since Cardano has been trading close to a dollar and the platform has a lot of well-thought-out development, this may be the smartest play [FD7] can make for bigger returns.”
By giving every user the ability to generate user-defined tokens on Cardano, the “Mary” upgrade opens the door to a long list of new applications, limited only by the users’ imaginations. This holds the potential to empower those in emerging economies through the affordable and borderless nature of Cardano native tokens — while simultaneously alleviating the pain points associated with user-defined tokens on existing blockchain protocols.
When looking at Cardano in comparison to ETH, it’s easy to see the potential the protocols has. Cardano, perhaps alongside Ethereum could be the train tracks that an entire network of dApss run on for multiple industries – finance, health care, insurance to name a few. Cardano has also taken the fight against Ethereum. We all know that a little bit of healthy competition always works out best for the end-user which is a positive thing for the broader crypto movement.
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