Cardano and its native token, ADA, faced a significant decline in the second quarter of 2024, mirroring the overall downturn in the cryptocurrency market. The price of ADA dropped by 39.7% to $0.39, leading to a 39.4% decrease in market capitalization to $14 billion. Despite a slight increase in circulating supply, which impacted market cap figures, ADA’s ranking slipped from 9th to 10th place. Transaction fees on the Cardano network also experienced a downturn, with revenue in USD falling by 44.3% QoQ to $0.74 million and revenue in ADA decreasing by 28.0% to 1.60 million. Additionally, average daily transactions on the platform decreased by 27.5% to around 51,400, while daily active addresses (DAAs) saw a 33.2% decline to 31,800. The average transaction fee in USD dropped by 23.1%, while the fee in ADA saw only a marginal decline of 0.6%.
Staking Metrics and Treasury Balance
In terms of staking metrics, total ADA staked and the staking rate saw slight increases, but the total value of staked ADA in USD dropped significantly by 39.6% to $8.9 billion due to ADA’s falling price. The treasury balance measured in ADA rose by 5.8% to 1.57 billion, although its dollar value decreased by 36.7% to $604.7 million. Currently, 20% of transaction fees are allocated to the treasury, indicating potential financial stability despite the market challenges.
Decentralized application (DApp) activity on Cardano experienced declines, with average daily DApp transactions dropping by 35.7% QoQ to 34,300. Similarly, average daily decentralized exchange (DEX) volume in USD decreased by 42.5% to $4.2 million. The total value locked (TVL) on Cardano also saw a substantial decline of 41.2% QoQ to $219 million, largely driven by broader market conditions rather than Cardano-specific factors.
The stablecoin market cap on Cardano saw a decrease for the first time since late 2022, dropping by 12.4% QoQ to $19.6 million. Average daily non-fungible token (NFT) sales also took a hit, plummeting by 57.4% QoQ to under 730 transactions. These challenges reflect the volatility and unpredictability of the cryptocurrency market, impacting various sectors within Cardano’s ecosystem.
Despite the setbacks, the report highlights ongoing developments within Cardano’s ecosystem, including the introduction of new stablecoins like USDM and MyUSD. These stablecoins have seen a significant increase in market cap, indicating a potential shift in the platform’s landscape. Moreover, upcoming upgrades such as the Chang Hard Fork aim to enhance Cardano’s governance capabilities, bringing the network closer to its long-term goals of self-sustainability and participatory decision-making. These improvements offer hope for the future of Cardano, presenting opportunities for growth and resilience in the face of market challenges.
The decline of Cardano and ADA in Q2 2024 underscores the volatility and challenges inherent in the cryptocurrency market. While the metrics and performance indicators may have experienced setbacks, ongoing developments and upcoming upgrades suggest a promising outlook for Cardano’s future. By addressing the issues highlighted in the report and leveraging new opportunities for growth and innovation, Cardano may navigate through the current challenges and emerge stronger in the long run.
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