Cardano and its native token, ADA, faced a significant downturn in the second quarter of 2024, mirroring the broader decline in the cryptocurrency market. ADA’s price plummeted by 39.7% to $0.39, resulting in a 39.4% decrease in market capitalization to $14 billion. This decline was in part due to a slight increase in circulating supply, causing ADA’s market cap ranking to drop from 9th to 10th place.
Transaction Metrics
Transaction fees on the Cardano network, crucial for processing transactions, saw a decline in revenue both in USD (44.3% decrease to $0.74 million) and in ADA (28.0% decrease to 1.60 million). The platform also experienced a decrease in average daily transactions by 27.5% to around 51,400, and a 33.2% drop in daily active addresses to 31,800. Despite these setbacks, the ratio of transactions to active addresses increased by 8.4% QoQ, indicating a rise in “power users.”
While total ADA staked and the staking rate showed a slight increase, the total value of staked ADA in USD decreased significantly by 39.6% to $8.9 billion. Cardano’s treasury balance, measured in ADA, rose by 5.8% QoQ to 1.57 billion, although its dollar value decreased by 36.7% to $604.7 million. A portion of transaction fees are allocated to the treasury, currently set at 20%.
Decentralized application (DApp) activity on Cardano declined, with average daily DApp transactions dropping by 35.7% to 34,300, and average daily decentralized exchange (DEX) volume in USD decreasing by 42.5% to $4.2 million. Total value locked (TVL) on Cardano also decreased by 41.2% QoQ to $219 million, following a peak in March 2024. The stablecoin market cap on the platform decreased by 12.4% to $19.6 million for the first time since late 2022.
Ongoing Developments
Despite these challenges, there are positive developments within Cardano’s ecosystem. The introduction of new stablecoins like USDM and MyUSD saw a significant increase in market cap, signaling a shift in the landscape. Upcoming upgrades, such as the Chang Hard Fork, aim to enhance Cardano’s governance capabilities, bringing the network closer to its long-term goals of self-sustainability and participatory decision-making.
Cardano faced a notable decline in various metrics in the second quarter of 2024, reflecting the broader downturn in the cryptocurrency market. While there were setbacks in terms of market performance, transaction metrics, staking metrics, and application activity, ongoing developments within Cardano’s ecosystem provide hope for the future. As the network continues to evolve and adapt to changing market conditions, it remains to be seen how Cardano will navigate the challenges ahead.
