Cardano is one of the most active cryptocurrencies in 2021. After a sevenfold price gain in 2021, the coin is currently the third-ranked based on market cap. Such massive growth has sparked debates on its possibility of competing with Bitcoin and Ether in the future.
There is a higher possibility of more ADA value increase, given the rise is majorly credited to the introduction of smart contracts. The new platform would allow its inroads in the Defi and NFT markets. It can be the best solution for those looking to move away from Ethereum’s high fees and network congestion issues.
While ADA seems to be on an upward trajectory, it has had to deal with some major issues in the recent past. Some of the major issues Cardano has had to contend with in recent times are;
Strategic partnerships are one of the ways cryptocurrencies gain market traction. Cardano has been at the forefront of looking for partnerships to increase adoption and use cases. The latest of its partnerships is with Coinfirm, a blockchain analytics provider. The deal would see the crypto use Coinfirm’s analytics to ensure compliance such as adhering to the Financial Action Task Force guidelines and the Anti Money Laundering regulations.
However, not everyone in the crypto community welcomed the move. One of the high profile outfits to oppose it is Weiss Crypto, a subsidiary of the financial rating firm Weiss Ratings.
In a detailed Twitter thread, Weiss Crypto explains why it is against the move. It cites the move towards regulatory compliance has made the crypto space more censorship-prone, manipulated and politicized. These they believe should be left for the Central bank-backed digital currencies (CBDCs) and Facebook Diem.
Weiss Crypto reiterates that the crypto world is all about creating a new financial and economic layer free from repression or control of any single authority. The centralised financial system has led to excessive and aggressive interventions that have led the world economy to the brink of failure. It, therefore, believes any crypto that moves towards compliance is headed to its guaranteed demise.
Charles Hoskinson, Cardano founder, has responded to the Weiss Crypto concerns by stating that Cardano’s main aim was to build layers, modules and ecosystems to enable compliance with local regulations. Such that, while the networks work on the global platform, it can add identity, metadata, and such other things that allow compliance with the local business domain, whether regulated or not. Such partnerships only help in moving towards the network goals.
The network effects
The other issue Cardano has had to deal with is the queries on its development focus. Unlike the other projects that opt for the “first-to-market” products, Cardano is all about deep academic rigour which includes a deep peer-review process.
However, Hoskinson in an ask-me-anything session reiterated the need for quality products not rushing over anything. He cited the recent Poly network Hack as an example of why you should not rush the networks. In case of any mishaps, other people lose millions in investments.
Cardano remains one of the most exciting coins of 2021. Even though it has had to handle some issues, the founder seems to be in control. Given the market it has had in the year, it is only right that the crypto world trusts him.