Cardano was one of the most hyped Layer 1 chains in 2021 and was expected to become home to some of the topmost DeFi Dapps, but the events that unfolded soon after its launch failed to place Cardano in the same league as Ethereum and Binance Smart Chain. So then, how come Charles Hoskinson believes that Cardano’s TVL is over $19 billion? Let’s explore.
Is Cardano’s DeFi Really Worth $19 Billion?
The founder of Cardano and co-founder of Ethereum, Charles Hoskinson’s opinions and comments hold a lot of weight in the crypto industry. As such, in one of his tweets yesterday, Hoskinson stated,
“Fun Fact, if you counted the staked Ada, cardano’s TVL would be over 19 billion dollars. Why don’t we count it? Because you don’t need to lock your Ada to stake it. (sic)”
His claim is factually correct since 24.6 billion ADA, which makes up 72% of ADA’s supply, is staked.
And while fair, his comment came at a time when Cardano’s stablecoin Djed’s public testnet went live. Djed being a decentralized, algorithmically backed stablecoin, falls in the same league as TerraUSD (UST) and DAI.
The way Djed would work is that it will maintain stability through a combination of collateral and a reserve token.
Cardano’s top DeFi protocols, SundaeSwap, Minswap, and WingRiders, are also beginning to test the stablecoin through test pools on their platforms to see its possible real-world applications.
Now the reason this is a big deal is that Djed is critical in reigniting the hype that investors in the crypto space had for Cardano’s smart contracts.
The Rise and the Fall of Cardano
The anticipation for the launch of smart contracts in August 2021 pushed Cardano’s native coin ADA’s value to $2.96, making it the third biggest cryptocurrency in the world.
Cardano investors achieved their highest point in the same duration as network-wide supply observed the most ADA in profit.
Consequently, August became the last time ADA holders were most profitable as less than 0.8% of investors were in loss.
However, right after its launch, it took its sweet time to actually display some use cases in the DeFi space, which left investors dejected, and consequently, Cardano lost value falling by over 75%.
As a result, Cardano only has $200 million locked in total value, but it does have support from the industry, which believes that the chain has the prospect of becoming a much larger DeFi blockchain.
The evidence of the same is the ‘Wave ADA Yield Fund‘ launched by Wave Financial LLC. This fund has been designed to provide liquidity for new DeFi protocols launched in the Cardano ecosystem. The same Wave has committed an initial sum of $100 Million to support and expand Cardano’s DeFi space.
In conclusion, while at the moment, Cardano may not seem like a lucrative DeFi blockchain, the ongoing developments and aforementioned support might give it the advantage needed to become a major player in the crypto space.
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