After Bitcoin reached an all-time high price of $123k on July 14th, it appears that altcoin season finally got its wings. Over the last month, Ethereum (ETH) has been steadily surging toward $4k, having outperformed Bitcoin at 56% vs 14% respectively. Although it is uncertain if ETH will ever reach its previous ATH of $4.9k in November 2021, Ethereum’s recent resurgence has evoked the fond memories of the 2021 bull run.

Global “altcoins” interest over the last 30 days. Image credit: Google Trends

Moreover, Bitcoin’s dominance plunged from the yearly high of 65.1% to 59%, a sure sign that altcoin season is afoot. But where does Cardano (ADA) fit in? After all, Cardano’s founder Charles Hoskinson is one of Ethereum’s co-founders, positioning the blockchain as a general-purpose smart contract platform to enable decentralized finance (DeFi).

Is Cardano worth exposure in a new altcoin season, as cheaply priced as it is?

Cardano’s Perception Sentiment

Over the years, and especially after the string of crypto bankruptcies in 2022, Ethereum maintained and expanded its DeFi dominance with over 1300 decentralized applications (dApps), holding total value locked (TVL) of $83.7 billion. Far distant is Solana (SOL) at $9.9 billion TVL and just over 200 dApps. 

Solana not only became the hub for launching memecoins, but is rated as the fastest blockchain at 1,251 real-time transactions per second (TPS). But where is Cardano?

Unfortunately, Cardano ecosystem is ranked 22nd in TVL at only $388.9 million, denoting low DeFi engagement with only 50 dApps. Not only that but Ethereum-adjacent layer-2 scaling solutions, such as Base, Arbitrum, and Polygon, have a TVL of $8.3 billion combined, 21x higher than Cardano.

Cardano’s real-time TPS is ranked 39th, at 0.4 TPS and a maximum TPS per 100 transaction blocks of 11.62 tx/s. It is also telling that the Tron (TRON) network, specialized in frictionless stablecoin money transfers, ranks 5th among DeFi chains at $5.9 billion TVL. In short, this makes Cardano look laggard:

Cardano added Alonzo hard fork functionality, enabling smart contracts, relatively late in September 2021, much later than either Solana (SOL) or Avalanche (AVAX).

More importantly, developers tend to view Cardano’s framework as unfriendly. In a 2024 survey, 30% of programmers were unsatisfied with Cardano’s lack of documentation, while 23% expressed general discontent.

Plutus programming language for smart contracts, built from Haskell, has typically a higher barrier to entry and a smaller developer pool compared to Ethereum’s Solidity.

Porting existing dApps from more popular chains is more complex due to Cardano’s layered architecture between settlement (CSL) and computation (CCL), in addition to network, consensus and ledger layers.

Cardano’s barrier to entry is further burdened by its extended UTxO (EUTxO) model, wherein each unspent transaction output is consumable once, requiring the redesign of dApps specifically to run on Cardano.

Combined with an undeveloped ecosystem, this doesn’t bode well for Cardano’s future prospects. But the question is, should Cardano be viewed as superfluous in the DeFi arena, or is it just waiting to emerge? There are certainly signs pointing in the latter direction.

Cardano’s Positive Side

The aforementioned developer survey highlighted that Aiken is the greatest asset of Cardano’s developer ecosystem, alongside having a high concentration of talented developers. As a domain-specific language launched in April 2023, Aiken is simpler to use while also being close to popular languages like Rust, Elm and TypeScript. 

Resolving Cardano’s prior bottlenecks with Aiken makes it easier to deploy future smart contracts. There is also an ongoing effort to optimize Aiken further.

Perhaps the most important driver for Cardano’s adoption is its access to TradiFi via stablecoins. Although USD is constantly eroded by central banking that monetizes government overspending, the dollar still provides predictable value and is universally accepted. Yield remains a fundamental concept across both traditional and decentralized finance — whether earned through interest-bearing assets or liquidity provisioning — and stablecoins make that transfer of value functional and dependable in DeFi protocols.

DeFi apps on all chains need such an anchor to hedge against volatility, so borrowing and lending can be conducted with stable collaterals. Presently, Cardano has USDM stablecoin provided by registered Money Services Business Moneta Digital LLC. Although USDM features tight backing managed by the respected Fidelity, the stablecoin circulation is quite limited due to geo-restriction.

Year-to-date minting and burning of Cardano’s USDM stablecoin is fairly minimal compared to other chains. Image credit: Moneta

According to DeFiLlama, the entire USDM market cap on Cardano is just $32.87 million, which represents 0.02% of Ethereum’s stablecoin presence across USDT, USDC and other stablecoins. Suffice to say, Cardano’s liquidity problem needs to be addressed to attract both users and developers.

On June 11th, Charles Hoskinson moved to solve this problem by noting that Input Output Hong Kong (IOHK), in charge of Cardano’s development rebranded into IOG – Input Output Global, could allocate $100 million worth of ADA tokens into USDM “to boost trading, market making, and TVL on Cardano.”

Hoskinson had also proposed an allocation into Bitcoin, but retreated from that idea. Instead, the direction seems to be diversification across Cardano’s native assets and privacy-oriented Midnight (NIGHT) token. 

Whatever the case may be, the key question is how well funded is Cardano? As with any company, investors need to know the cash runway to determine if the project is viable.  The audit is scheduled for mid-August, and is “shaping up quickly”. Reading between the lines, it appears that the report will be positive.

Namely, Charles Hoskinson tweeted that he is “meeting with the defamation law firm”, which is related to claims that he misappropriated $600 million worth of ADA tokens. If it turns out that the truth is in the opposite direction, Cardano is one of the most well-funded projects in crypto space.

This is extremely important, as it establishes Cardano’s staying power. In turn, ADA investors are more likely to take the exposure among the increasingly fragmented and diluted crypto ecosystem. In other words, legacy and familiarity themselves are likely to boost ADA value.

Cardano’s Scaling Efforts

In May 2023, Hydra launched as Cardano’s key milestone, the blockchain’s layer-2 scaling solution. It is named so because the channels/nodes have the same security properties as Cardano itself, but with superior TPS and negligible fees. 

Conceptualization of Cardano’s scaling efforts via Hydra heads. Image credit: IOHK 

Although Hydra is still foundational and expanded since, the Cardano blockchain will move to adopt cutting-edge blockchain tech such as Midgard, zkFold, and Gummiworm. 

With the emphasis placed on security as the core principle of Cardano’s development through academic peer-reviews, it is likely that Cardano will avoid the trap of capturing the emerging DeFi market with reputation-destroying strings of vulnerability exploits.

The aggressively hostile Biden admin is another positive macro-happenstance for Cardano. It was during that period in which the DeFi ecosystem could’ve evolved to much greater extent. As that didn’t happen, Cardano’s development has time to catch up, without sacrificing user safety.

Combined with funding, stablecoin plans, positive reception of Aiken and developer talent, it is safe to say that Cardano remains one of the strongest crypto projects.

The Bottom Line

Over one year, ADA token is up 100% compared to ETH’s humble 7.6% gain, owing to the latter having a much greater market cap. Presently priced at $0.89 per ADA token, Cardano’s valuation is still far from its ATH price of $3.10 in September 2021.

Just as with Ethereum, it is unlikely that this price level will be achieved any time soon. After all, 2021 was highly anomalous due to stimulus packages and the Federal Reserve’s historic money-printing spree. 

However, at a time when people are overwhelmed by thousands of new tokens and disillusioned with memecoin gambling, it is likely that ADA will again reward investors. But now and in the near future, Cardano’s fundamentals are much stronger despite the setbacks.  

As for Hoskinson himself, he expects to see Cardano’s market cap 4x greater than both Ethereum and Solana combined. 

The post Cardano: A Sleeping Giant? appeared first on Crypto News Australia.

---

Filed under: Bitcoin - @ July 23, 2025 12:02 am