Finance

Total Value Locked on Cardano Reaches Highest Since Last March

02/09/2023
Bitcoin Ethereum News

Cardano

  • Cardano’s TVL crossed the 100 million USD mark, again.
  • DJED stablecoin launch could have a major part in pushing the metric
  • ADA is trading at 0.3998 USD after 3.22% raise in a day

The cryptocurrency market faced a slowdown for almost a year after the global crypto market hit its all-time high in November 2021. The harsh macroeconomic environment, tense geopolitical situations, and a number of major incidents within the crypto space made the movement more difficult. However, 2023 might be dispelling the dark clouds as the assets seem to blossom again since the year started.

The total value locked on Cardano doubled within a month

Major cryptocurrencies (by market cap) like Bitcoin (BTC) and Ethereum (ETH) are trading in the green zone, including Cardano (ADA). The Total Value Locked (TVL) on the decentralized finance (defi) space of the Cardano network is more than 100 million USD.

The numbers are impressive, given the disparity between the community’s expectations of ADA price and its reality. ADA price rose sharply since the start of the year but failed to meet set expectations. ADA rose to over 0.41 USD from 0.25 USD and is currently trading at 0.39 USD (at press time). The community’s expected price level for January 2023 was 0.495 USD.

DefiLIama data shows the jump in TVL on Cardano is significant, as it rose from just 48.95 million USD on January 1 to 107.93 million USD at the time of writing. The TVL was the highest since March last year when it reached 326 million USD. 

source – DefiLIama

The value in terms of ADA also follows the same growth pattern as it reached 270.15 million ADA, which was 198.65 million ADA at the start of the year. The last time the numbers were the same was in July last year. 

source – DefiLIama

Stablecoin DJED launch pushed TVL 

The recent launch of Djed (DJED), an algorithmic stablecoin based on the Cardano network might have boosted the TVL to more than double in just a month. After its announcement in September 2021, the stablecoin saw its launch at the end of January 2023. Charles Hoskinson’s Input Output Global (IOG) has designed the stablecoin, and the COTI group handles issuance.

Within a short span after its launch, the reserve ratio for DJED reportedly exceeded 600%. Investors were said to allocate ADA tokens worth 30 million to the base reserve to mint 11.8 million stablecoins per week. 

The “Ethereum killer” blockchain network rolled out smart contracts in 2021 and has witnessed a significant jump in numbers since then. Another reason for the jump in TVL could be that Cardano recently deployed more than 5,000 smart contracts over the network.

Cardano transitioned to a Proof-of-Stake consensus mechanism some time around Ethereum Merge upgrade (from Proof-of-Work to Proof-of-Stake). Notably, Cardano pulled of the transition much faster than Ethereum.

Source: https://www.thecoinrepublic.com/2023/02/08/total-value-locked-on-cardano-reaches-highest-since-last-march/