This year, Cardano reached major milestones, implementing the Chang hard fork and shortly after announcing it's advancement as a bitcoin settlement layer, tapping into trillions of BTC liquidity for DeFi. After Trump's landslide victory, rumors that Cardano's founder Charles Hoskinson will become a crypto advisor started.
Cardano's native currency ADA jumped significantly after Trump's victory. Undoubtedly, the positive macro developments of a pro-crypto government taking office in the USA in 2025 have contributed to ADA's surge, rising over 100% in just seven days. Fundamental metrics don't reflect this price appreciation though.
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A high level view of the research centered Cardano ecosystem
Charles Hoskinson, a mathematician, entrepreneur and co-founder of Ethereum, is the primary founder and visionary behind the Cardano blockchain. The blockchain is designed to address the limitations of previous networks such as Bitcoin and Ethereum. It uses a unique Proof-of-Stake (PoS) consensus mechanism (Ouroboros) that offers greater energy efficiency compared to Proof-of-Work (PoW) systems. Supporting smart contracts and decentralized applications (dApps), Cardano prioritizes scalability while maintaining security and decentralization.
Distinguished by its academic foundation, the platform is built on peer-reviewed research and a scientific, evidence-based development process. The high value placed on the scientific and research-based approach can be seen in the names given to key elements of the Cardano blockchain, leading to it often being referred to as an "academic blockchain". For example, Cardano's home currency is named after Ada Lovelace, a 19th century mathematician who is often considered the world's first computer programmer. This academic ethos runs deep in the DNA of Charles Hoskinson, whose family background includes several physicians. Reflecting this, Hoskinson founded the Hoskinson Clinic, which accepts ADA as a form of payment.
Recent developments and a collaboration with Ripple in sight?
Cardano's Chang hard fork gives ADA holders more governance rights, allowing them to vote on future updates to the blockchain. The blockchain will also become more efficient, increasing transaction speed from 250 to over 1,000 transactions per second. In addition, new security features will make it safer from cyber threats. This update, combined with the launch of the BitcoinOS Grail Bridge connecting bitcoin and Cardano, opens access to bitcoin's massive $1.8 trillion liquidity pool. It enhances functionality by allowing Cardano users to interact directly with bitcoin without the need for intermediaries. This creates exciting new opportunities in decentralized finance (DeFi), combining bitcoin's strong security with Cardano's advanced smart contract capabilities.
Recent interactions between Charles Hoskinson and Brad Garlinghouse, CEO of Ripple, have sparked speculation about a potential collaboration between the two major cryptocurrency projects. Hoskinson shared that he had a conversation with Garlinghouse, describing him as "extremely collaborative". Garlinghouse responded positively, emphasizing the importance of unity within the crypto community. One potential area of collaboration discussed was the integration of Cardano's privacy-focused sidechain, Midnight, into the XRP ecosystem, which could open up new opportunities for both networks. Similar to Cardano Ripples native currency XRP experienced positive price action, potentially fueled by the U.S. District Judge's landmark ruling that XRP is not inherently a security when sold to retail investors on public exchanges.
Thanks for the kind words @IOHK_Charles -- now is the time for the crypto community to come together, push for a level playing field and clear rules of the road.
A rising tide lifts all boats. https://t.co/vOzXaS6mVP
— Brad Garlinghouse (@bgarlinghouse) November 12, 2024
Potential involvement in the US government
Charles Hoskinson recently announced that he will work closely with lawmakers and the Trump administration to advocate for crypto-friendly regulations as the U.S. crypto advisor. While not officially part of Trump's team or publicly endorsed by Trump, his involvement highlights a proactive approach to shaping the regulatory landscape. This is an interesting change of heart, as he endorsed Robert F. Kennedy Jr. for president in April 2024 after stating that he would not choose between the lesser of two evils, namely Biden or Trump. RFK has since been appointed by Trump as the United States Secretary of Health and Human Services (HHS).
Breaking: #cardano’s @IOHK_Charles will be working directly with the US government and incoming presidential administration on #crypto policy in 2025.
Security, integrity, scientific approach. They always mattered. $ADA
Straight from the horse’s mouth: pic.twitter.com/BJRZObIUvj
— ADA ape 🌍|| "APE" (Pool) (@TheADAApe) November 9, 2024
In addition to his close relationship with RFK, Hoskinson is also in touch with another key figure in Trump's campaign, Elon Musk, who will head the Department of Government Efficiency (DOGE). Hoskinson tweeted about a visit to SpaceX. The month before, Cardano had completed a workshop with NASA, indicating Cardano's interest in the space race.
Lagging ecosystem metrics
Cardano's fundamental user metrics continue to lag significantly behind competition though. In all relevant benchmarks, other Layer 1 blockchains outperform the "academic network" by several magnitudes. For example, despite the much more expensive transaction fees, Ethereum boasts 400'000 daily active addresses compared to Cardano's 60'000. Blockchains with comparable fees such as Solana and Near have daily active addresses in the millions.
Other metrics are even more extreme. Cardano's network only processes 100'000 transactions per day, while Ethereum does 1.2 million, Near 6.3 million and Solana over 47 million. Trading volumes and Total Value Locked (TVL) are practically non-existent on Cardano when compared to its market cap. Hence, based on fundamental metrics, many investors see Cardano as overvalued. Due to a strong community and narrative, it has been able to stick around for many years though.
