Cardano (ADA) has become the seventh biggest blockchain in the world, with a total market valuation of more than $40 billion. Before that, it had completed a $300 million TVL contract.
The reason behind its spike in market cap
The main reason for such a rapid increase in capitalization is the network’s growth from both a market and fundamental perspective. The project’s capitalisation is linked to the price of the underlying ADA token, which just hit $1.2.
The price increase is due to the increasing number of decentralized solutions powered by Cardano. A decentralized peer-to-peer lending and borrowing system and an interoperable layer 2 are two solutions that users could expect to experience this year, according to U.Today.
Why did the TVL of Cardano increase by 350% in March?
The primary reason for this growth can be attributed to at least two factors: the launching of new DeFi platforms such as Minswap, as well as the general recovery of the DeFi industry, which had lost some of its popularity in December-January.
According to DeFiLIama, by the end of March, the total value of funds for all projects in the industry climbed from approximately $200 billion to $223 billion. In the last 28 days, Cardano has seen its TVL to rise from $134 million to $326 million.
With the recent spike in inflows into the DeFi industry, it appears that the market’s demand for risk-on assets has increased again, and investors are actively redistributing their portfolios, being open to riskier options such as high-APY stablecoins