Grayscale, a cryptocurrency asset management firm, published a report outlining the third-largest blockchain’s good and bad sides. Notably, its analysis appealed to both novices and seasoned crypto investors.
Among its advantages, Grayscale noted, is that the network’s founder, Charles Hoskinson, is an “iconic founder.” Also, Cardano has a large following, it’s open-source, and its native currency, ADA, is available on many exchanges.
Grayscale further observed that Cardano “is a Web 3.0 crypto network aiming to power an internet-native global cloud economy.”
The crypto asset management firm stated ADA’s diverse uses. For instance, Cardano’s base asset “is utilized for […] making transactions, providing system security via staking,” governance, covering network fees, and “enabling developers to build decentralized applications (Dapps).”
Grayscale also recognized the advantages of the recent Alonzo upgrade, which introduced smart contract functionalities on the decentralized network.
Cardano’s “Fee Revenue” Rises by 6,500 Percent, MAUs Skyrocket by 730%
According to the investment firm, the functionality paves the way for Dapps, which “should allow” the third-leading blockchain by market capitalization “to eventually” step up its competition on “crypto cloud market segments.”
These segments include, but not limited to, NFTs (non-fungible tokens) and DeFi (decentralized finance).
Other Cardano strongholds were rooted in the network’s “fundamental trends.” For instance, the blockchain has facilitated transactions worth more than 1.6 trillion USD since its “core PoS protocol went live.”
Also, the blockchain currently handles more than 115K transactions per 24 hours. Notably, this shows a 1,300 percent increase since the start of this year.
In its observation, the cryptocurrency asset management company noted that the “fee revenue paid to ADA holders” who participate in securing the network “has continued to rise rapidly.”
According to Grayscale, the fee revenues increased by roughly 6,500 percent in the last one year. It added that Cardano’s monthly active users have skyrocketed by approximately 730 percent “since the start of 2021.”
The virtual currency assets management company forecasted the network’s positive impact in the short, medium, and long terms. However, fulfilling these goals depends on the success of Dapps on the blockchain.
Only Bitcoin and Ethereum Are Not Securities
For example, if they are successful, ADA investors may contemplate investing in new assets such as NTFs in the short term. In the medium term, “Cardano may act as a higher beta play to Bitcoin.”
However, it wasn’t all praises. Grayscale also outlined Cardano’s weaknesses. Notably, its top shortcomings revolve around network security, network incentives, regulations, and mainnet applications.
For instance, the report noted that the blockchain’s “fee revenue is still relatively low compared to other PoS blockchains.”
Additionally, the Cardano blockchain lacks Mainnet applications and faces “legal & regulatory uncertainty” since only Bitcoin (BTC) and Ethereum (ETH) are viewed as assets and “excluded” from being securities.
On network security, Grayscale Investments observed that Cardano’s “formal verification” may be insufficient to protect the network from “technical problems or improperly designed economic incentives related to its PoS consensus.”
In July, Grayscale Investments added ADA to its Digital Large Cap Fund. Notably, the addition came before Cardano activated smart contract functionalities.
However, the Alonzo upgrade is finally bearing fruits. Cardano has welcomed its first decentralized exchange (DEX), Ardadex Protocol, which doubles up as an NFT marketplace. The protocol allows liquidity providers to earn a passive income.
Cardano Summit 2021 Showcases Partnerships With Dish, Chainlink, UBX, Veritree, AID:tech
The launch of the first DEX and NFT marketplace on Cardano comes a few days after the completion of the Cardano 2021 summit last month.
The conference was a mix of in-person and virtual attendance and was graced by innovators and experts. Apart from an outline of Cardano’s capabilities, the summit culminated into notable partnerships.
For example, Cardano announced its partnership with Dish Network, which is a fortune 250 firm. Input Output Hong Kong (IOHK) said that the partnership is meant to bring “the world of global telecoms and the blockchain space together [and grow] adoption for Cardano.”
During the same event, Cardano disclosed its partnership with Chainlink. According to IOHK, joining hands with Chainlink would enable “Cardano developers build […] secure DeFi applications.”
Cardano also announced coming together with Philippines UnionBank’s technology arm, UBX. Cardano aims to use it to drive on-chain DeFi activity.
In the meantime, Cardano’s founder is “taking two weeks off” in preparation “for the [Cardano] Africa tour.”