Cardano price has crashed from its peak, erasing $85 billion in value: here’s why

Cardano price has been in a prolonged downward spiral since peaking at $3 in 2021. The decline has erased more than $85 billion in market value, with its market capitalization falling from over $91 billion to about $5.7 billion today. ADA was trading at $0.1590, down more than 95% from its all-time high.

Cardano price has plunged amid weak network growth

Launched by Charles Hoskinson in 2017, Cardano was always seen as the best alternative to Ethereum, which was known for slow speeds, high transaction costs, and high carbon emissions.

Cardano was the exact opposite. It was based on a better approach than Ethereum’s proof-of-work, had low transaction costs, and faster speeds. It was also peer-reviewed and launched by a co-founder of Ethereum.

Years after its launch, Cardano has not lived up to its earlier hype, a move that has seen its market capitalization crash by over $85 billion. While many reasons remain, the main one is that it has become a ghost chain.

A ghost chain is defined as a crypto project that no one uses. In Cardano’s case, it has just a handful of developers, many of whom have abandoned ship over time. 

A good example of this is in the decentralized finance (DeFi) and the real-world asset (RWA) tokenization industry. Data shows that Cardano has zero market share in RWA, an industry that has over $15 billion in assets today. 

Similarly, in DeFi, the network has accumulated just $88 million in total value locked (TVL), a figure that has plunged from over $700 million early last year. Activity in some of the top players in the ecosystem, like Minswap, Liqwid, Dano Finance, and SundaeSwap, has waned.

Cardano has become a tiny player in the stablecoin industry because many major stablecoins have not deployed to the network. It unveiled USDCx earlier this year. The total stablecoins in the ecosystem are worth less than $45 million, a tiny amount in an industry that has over $315 billion in assets. 

Cardano’s DEX activity has also waned this year. While Solana’s protocols have handled $50 billion in volume in the last 30 days, Cardano has processed transactions worth $87 million.

Efforts to boost network growth have not worked out

Cardano’s collapse happened even as Hoskinson and the team launched several initiatives. For example, they reached a deal with Pyth Network late last year, making it the most prominent oracle in the platform. By doing this, the team hoped that it would attract more developers to the network. This has not worked out.

The team also launched Midnight, a zero-knowledge-based network. According to Hoskinson, Midnight has more features, especially privacy ones, that make it more attractive to users. Months after its launch, Midnight has not attracted many developers to the network. 

Hoskinson and the team are also working on the Leios upgrade that will make it a faster platform by introducing parallel processing. Again, it is unclear whether these efforts will make it a more popular chain like Ethereum and Solana.

Events in the crypto industry have also contributed to its downfall. For one, Bitcoin and most altcoins have retreated sharply this year. Also, many chains that aimed to become Ethereum alternatives have not succeeded. This includes chains like Ziliqa, Algorand, EOS, and IOTA.