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On-chain data shows that Cardano grew at an above-average rate in the first quarter of 2023. Since January 1, cardano market cap has increased 54 percent from $8.6 billion to $13.2 billion. This surge caused Cardano to rise from 9th to 7th place in the ranking of the largest cryptocurrencies by market cap since the beginning of the year. At press time, ADA is trading around $0.4.
DeFi sector grows by 194.9 percent
The Total Value Locked (TVL), i.e. all the money in the smart contracts of Cardano projects, increased by 194.9 percent from $50.8 million to $149.8 million in the first quarter of 2023. This increase was supported by established protocols such as MinSwapas well as newer protocols like Liqwid Finance driven. Additionally, since January, the combined value of all stablecoins in the Cardano ecosystem has increased by 261 percent to over $10 million. The stablecoins IUSD from indigo as well as DJED by Djed were primarily responsible for this growth and one of the main drivers behind the increase in Cardano TVL in the first quarter of 2023.
The development of Cardano’s TVL is remarkable. However, when compared to Ethereum and its scaling solutions, the ADA ecosystem is still tiny. Ethereum TVL is currently $28.71 billion and the two largest L2 scaling solutions alone, Arbitrum and Optimism, add up to one TVL of approximately $2.9 billion.
Cardano development is progressing
Another positive development is the launch of the first Hydra Heads. Hydra is a layer 2 state channel scaling solution and the first scaling solution in a series of scaling upgrades that first went live on the Cardano mainchain in March.
Hydra aims to improve the scalability and performance of the ADA network by offloading transactions and smart contracts from the main blockchain to separate, parallel channels. These channels allow for faster and more efficient processing of transactions while reducing Cardano’s network load.
Cardano is the 5th largest blockchain for NFTs
In the first quarter of 2023, Cardano’s NFT sector recorded According to Messari a 27 percent drop in daily transactions. In addition, NFT trading volume on Cardano fell to $40.5 million compared to the previous quarter. However, despite this drop, Cardano is still the one 5th largest blockchain by NFT trading volume.
The NFT sales volume on Cardano was therefore concentrated on the NFT marketplace Jpg.store. This was responsible for around 98 percent of the total ADA NFT trading volume in the first quarter of 2023, with SpaceBudz is Cardano’s most popular ADA NFT collection.
Conclusion
Cardano’s development is often slower than ADA developers would like. The developer community prioritizes sustainability and stability over speed. This is evidenced, for example, by the fact that smart contracts were only activated with the Alonzo hard fork in 2021, more than four years after the network was launched. Despite these circumstances, the blockchain project is continuously expanding its presence in the crypto space. The DeFi sector in particular seems to be increasingly establishing itself on the crypto market.
