Cardano Down 90% Since September 2021, Did Smart Contracts ‘Kill’ ADA?
August 19 2024 - 7:30PM
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At the peak of the 2020 to 2021 bull run, ADA, the native token of
Cardano, rose to $3 in August. Interestingly, developers activated
smart contracts around the top of this cycle after completing the
Alonzo hard fork, ushering in the Goguen phase. Did Alonzo And
Smart Contracts Kill ADA? However, as Atomic Wallet analysts note,
ADA has been on a downtrend since then, crumbling by over 90% over
the years at the time of writing. ADA is changing hands at $0.32
when writing, finding immediate support at around $0.30, a
psychological number. Related Reading: Bitcoin Sees Momentum In
Hashrate Despite Failure To Beat $60,000 Resistance Though traders
are optimistic about what lies ahead, the turn of events over the
last three years could suggest that the activation of smart
contracts on Cardano did “kill” the coin’s valuation. The
plummeting prices, made worse by the 2022 crypto winter, mean those
who bought in August 2021 are holding mud. Whether ADA will
recover in the coming weeks and rewind losses of 2022 remains to be
seen. What’s clear is that the activation of the Alonzo hard fork
and the start of the Goguen era was a key milestone for Cardano.
The transition was crucial considering that before September 2021,
developers couldn’t deploy dApps and take on Ethereum and competing
properties supporting smart contracts. For years, since the genesis
block, Cardano developers have been accused of delaying the process
while using billions for development. After Alonzo, users can, even
now, create complex smart contracts using Plutus scripts and run
dApps. Like other blockchains, all fees are payable in ADA, the
native token. Over the years, Cardano has grown its ecosystem,
looking at the total value locked (TVL). According to DeFiLlama,
DeFi protocols on Cardano, active after Alonzo, now manage over
$177 million in assets. Though relatively low compared to those in
Ethereum and the BNB Chain, developers took advantage of smart
contracts and built solutions on the network. Cardano Transitioning
To Voltaire: Will Things Change? The current disconnect between ADA
valuation and the expectation of coin holders post-Goguen is a
concern. It is so especially as Cardano completes the Basho stage,
moving to Voltaire, the final phase of the platform’s development.
Related Reading: Will Ethereum Reach Over $3,000 In September?
Analyst Bets On 80% Odds Voltaire focuses on making Cardano
governance decentralized. Here, ADA will have more utility,
allowing holders to vote on proposals and directly helping improve
the network. Additionally, there will be a treasury for funding
projects deploying on Cardano. So far, the Chang hard fork is in
progress, with roughly 33% of all stake pool operators (SPOs)
ready. Meanwhile, ADA remains under immense selling pressure and
could plunge to 2023 lows of around $0.22 if buyers don’t step in.
If prices rise above $0.50, bulls will likely push ADA toward March
2024 highs. Feature image from Shutterstock, chart from TradingView
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