Before, Cardano was always one of the top 10 cryptocurrencies by market capitalization. Now, it’s no longer in that special group. This change shows that the cryptocurrency is still having problems, such as more competition and slow usage rates.
Several things have led to the drop: Cardano’s reliance on off-chain parts, its network not being used as much as competitors like Ethereum and Solana, and its inability to keep up with faster competitors. Its price hit a high point of $3.09 in September 2021, but it is now only worth $0.33, and its market value has dropped from almost $100 billion to just under $12 billion.
Cardano Faces Increased Competition
A key way to compare cryptocurrencies is by their market capitalization. Cryptocurrencies with bigger values tend to be more stable and well-established. Cardano has had a hard time getting users because Ethereum and other Layer 2 options have made it less competitive relative to them.
Many projects in Cardano’s ecosystem have failed, even though work is still going on. This has made users less interested and made the ecosystem heavily reliant on the ADA token.Cardano’s smart contract features have also been criticized because they depend on off-chain parts that are not part of the blockchain.
This goes against the idea of openness. Some risks include users’ money getting stuck during outages and problems with keeping custom solutions up to date. ADA network activity is still low compared to its competitors, which is one reason why its market cap is going down.
Intersect has recently asked Cardano decentralized application projects to speed up their plans for the upcoming Chang Upgrade #1. For ADA to move toward a fully decentralized system, this upgrade is a must. It will add on-chain control.
Over 80% of ADA stake pool owners have already updated their validator nodes, but exchanges and decentralized apps have not yet done the same.Cardano’s falling market position could mean that investors are losing faith as trade volumes and market interest drop. A recovery might be possible, though, if ADA improves its environment and gets going again.
