Cardano TVL is rising steeply after its SundaeSwap platform was fully released.
Cardano TVL surges
Cardano is a network that we have covered many times since it is one of the most polarizing blockchains on the market. While some call it “vaporware” and accuse Cardano of overpromising and underdelivering, its die-hard fans continue to believe that Cardano will eventually live up to its grand promises. According to the latest TVL data on Cardano, at least some of them are putting their money where their mouth is.
The network has seen a sudden surge in investments, rising from $97 million AUD to $171 million AUD at the time of writing. Analysts attribute this sudden influx of money to the launch of Cardano’s SundaeSwap decentralized exchange. The exchange experienced smart contract problems during its Beta launch but now looks ready to go. 98% of the entire TVL on Cardano is concentrated in SundaeSwap, indicatory of investors’ hunger for working protocols and the lack of options thereof on Cardano. Second-placed MuesliSwap has a measly $2.8 million AUD in TVL.
However, the TVL on Cardano obviously pales in comparison to the blockchains it plans to rival. Market leader Ethereum boasts an impressive $161 billion AUD in TVL, light years away from where Cardano is at the moment (and where it wants to be). The same goes for blockchains that puzzlingly have a lower market capitalization than Cardano, such as Terra, Avalanche, Fantom, and Polygon. According to DefiLlama, a DeFi analytics site, Cardano only sits in 34th place for total value locked, behind the Neo blockchain but ahead of Oasis Protocol.
Cardano price performance
Whether it was due to the TVL spike or to a wider market rally, the price of ADA rallied last week and is trading firmly above $1 AUD, after several months of downward movement. After breaking the important $1.40 AUD support line that ADA had set during its bull market run, it looked all but set for further losses before a sudden course reversal saved the day. However, ADA is far from being out of the woods from an investment standpoint.
First, rivaling layer-one blockchains are quickly gaining ground on ADA in terms of market capitalization. Cardano has fallen to 8th position but incredibly still trades ahead of Avalanche and Polygon, two blockchains with a lot more working applications and TVL.
Second, Cardano’s gap looks ever more daunting, considering the speed at which its competition is moving. For instance, the Terra blockchain has skyrocketed thanks to the adoption of its UST stablecoin, allowing investors to make a clear case for why they should invest in LUNA. However, the use cases of ADA, never mind its poor execution, still seem somewhat fuzzy. Investors are right to question whether yet another DeFi ecosystem will be enough to close the gap to leading chains, considering the speed at which the industry is moving.
Cardano bulls will not feel discouraged, though, and can rightly point to the quick growth of its first working product. Maybe it still is not too late to turn the ship around.
