Cardano is finally gaining massive traction as the upcoming Hydra upgrade proves to be a game-changer for ADA ⋆ ZyCrypto

1648077273 Australia Issues Caveat As 0.6 Million Citizens Lead Global Cardano Ownership

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Cardano (ADA) is currently the 7th largest crypto asset by market capitalization with a valuation of $36 billion. While impressive, the price is still 70% lower than the all-time high of $3.10 reached 7 months ago.

Since its inception in 2017, ADA promises big things, but takes the time to deliver them. Last year, with the highly anticipated Alonzo upgrade, they finally drove to introduce smart contracts to the network. With that set and done, Cardano was poised to become one of the best DeFi chains on the market. Yet the opposite happened. Overall, adoption was low and total value locked (TVL) on ADA’s smart contracts did not grow as expected. You add that to a general downtrend in the market and you get a staggering drop in price.

Despite a rough few months, ADA is now going strong with a vibrant community and for good reason. According to a report from Santiment, Cardano is currently one of the crypto projects with the most activity on GitHub. This means developers are working hard to improve the technology of the network. One of the leading projects is Hydra, a tier 2 scale solution.

What is a Layer 2 and why do we need it?

One of the key issues in the crypto industry right now is scalability. As more people enter the space, the demand for transactions rises, causing gas prices to skyrocket. A blockchain network has a limit on the number of transactions that can fit into each block. Therefore, there is a maximum number of transactions per second (TPS) that they can process.

With a layer 2 solution, off-chain transactions can be aggregated and synthesized and then posted together on the mainnet. In this way, the gas tariffs are divided over hundreds of transactions. This technique effectively multiplies the TPS that a blockchain can handle.

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Essentially, Hydra will make Cardano and the entire DeFi ecosystem faster and cheaper. Although it is still under development, progress is being made. The Hydra protocol has been running successfully on Cardano’s testnet since last week.

Aside from the impressive development behind Cardano, another bullish pattern is the growing TVL. The total value behind this project has tripled since February, surpassing $300 million yesterday. This means that more and more capital is flowing into decentralized protocols within Cardano. The leading dApp at the moment is the Minswap DEX, with 61% of the TVL.

Cardano finally seems to be gaining some traction in the DeFi space. If the ecosystem continues to grow, people will quickly recognize it as a viable alternative and demand will increase. The good thing is that the team is playing the long-term game and is already preparing the network for mass adoption.

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