At the peak of the 2020 to 2021 bull run, ADA, the native token of Cardano, reached $3 in August, marking a significant milestone for the project. However, the subsequent activation of smart contracts through the Alonzo hard fork led to a downward trend in ADA’s price, with the token currently trading at around $0.32. This drastic decline of over 90% has left investors who bought in during the peak of the bull run in a difficult position, with little hope of recovering their losses.
The activation of smart contracts on Cardano was seen as a pivotal moment for the project, signaling the beginning of the Goguen phase. This development allowed developers to deploy dApps and compete with other blockchain platforms supporting smart contracts, such as Ethereum. Despite the initial excitement surrounding this milestone, the plummeting prices of ADA post-Alonzo raise questions about the true value of the token and its ability to compete in the market.
Since the introduction of smart contracts on Cardano, the ecosystem has seen significant growth, with DeFi protocols managing over $177 million in assets. This demonstrates the potential for development and innovation on the platform, as developers leverage the capabilities of smart contracts to build solutions for various use cases. However, the disconnect between ADA’s valuation and the expectations of coin holders post-Goguen remains a concern, especially as Cardano moves towards the final phase of its development with Voltaire.
As Cardano transitions to the Voltaire phase, which focuses on decentralizing governance and increasing the utility of ADA, there is hope for the project to regain momentum and support from the community. The implementation of a treasury for funding projects on Cardano and the introduction of voting mechanisms for holders are intended to improve the network and drive further adoption. However, the current selling pressure on ADA could potentially lead to further price declines if buyers do not intervene, potentially pushing the token to new lows.
While the activation of smart contracts on Cardano was a significant milestone for the project, the subsequent decline in ADA’s price raises concerns about its long-term viability. As Cardano moves towards the final phases of its development, the platform must address these challenges and work towards building a sustainable ecosystem that can compete with other blockchain platforms in the market. Only time will tell if Cardano can overcome these obstacles and realize its full potential in the ever-evolving crypto landscape.