As of October 6, 2023, Cardano, represented by its ticker ADA, holds the eighth position in market capitalization within the cryptocurrency space. It is valued at slightly over $9 billion, accounting for approximately 0.817% of the total cryptocurrency market, which stands at $1.08 trillion. In the ever-evolving digital currency landscape, ADA has emerged as a significant player. This article explores the origins of Cardano, its native cryptocurrency ADA, its historical development, and its functionality.
An Overview of Cardano: Its Origins and the Visionaries Behind It
Cardano, an open-source and decentralized blockchain platform, facilitates peer-to-peer transactions using its native cryptocurrency, ADA. The inception of the Cardano project dates back to 2015, initiated by Charles Hoskinson, one of the co-founders of Ethereum. Hoskinson’s motivation behind Cardano was to address the challenges encountered in earlier blockchain systems.
The journey of Cardano commenced in 2015 with the establishment of IOHK (Input Output Hong Kong) by Hoskinson and Jeremy Wood, dedicated to research and development. Their objective was to harness peer-reviewed academic research in constructing a more secure and scalable blockchain. After extensive research and development efforts, the Cardano blockchain was officially launched in September 2017.
Underlying Technical Pillars: Ouroboros, Plutus, and the Native Digital Currency ADA
One distinguishing feature of Cardano lies in its consensus mechanism known as Ouroboros, which operates on a proof-of-stake (PoS) algorithm. Unlike Bitcoin’s proof-of-work (PoW) consensus, Ouroboros PoS empowers users to validate transactions and receive rewards. The developers of Cardano assert that Ouroboros, encompassing multiple iterations, stands as the initial PoS protocol with established security validated through peer-reviewed research.
The platform utilizes Haskell for its native smart contract language, Plutus. ADA serves as Cardano’s native cryptocurrency, supporting value transfer, staking, transaction fees, and governance. The total ADA supply is limited to 45 billion, with a current circulation of 35 billion. Since its inception, ADA has been involved in 76,098,522 transactions.
“Blockchain Ecosystem Analysis: Cardano’s Position in the Market”
As of October 6, data indicates that there are 3,577,963 distinct addresses containing ADA. Among these, the top ten holders control 8.73% of the entire ADA supply, while the top 20 account for 10.37%. The top 50 addresses have authority over 15.09%, and approximately 20.74% rests with the top 100 ADA addresses. The largest address, identified as “Ae2td,” possesses 1.65 billion ADA, which represents 3.67% of the total ADA supply.
At present, ADA is trading at $0.26 per unit, reflecting a 91% decrease from its peak value of $3.09 in September 2021. The U.S. Securities and Exchange Commission (SEC) has classified ADA and several other cryptocurrencies as potential securities or investment contracts. In response, IOHK has vehemently contested the recent SEC assertions, which categorized ADA as an unregistered security. IOHK has pointed out numerous inaccuracies in the filings and emphasized that ADA does not fall under the classification of securities according to U.S. regulations.
Despite encountering various challenges, Cardano has firmly established its position alongside leading blockchain platforms such as Ethereum and other primary layer (L1) networks. In the realm of decentralized finance (DeFi), Cardano ranks as the 15th largest chain in terms of total value locked (TVL), with the network’s TVL standing at $163.26 million as of October 6. The blockchain supports 27 distinct DeFi protocols. In terms of all-time non-fungible token (NFT) sales, Cardano is the sixth largest blockchain, boasting $611,361,634 in NFT sales.