I actually planned this post as a response to a user message that came to one of my posts, but I didn't want it to get lost there. That's why I'm sharing it separately. 🤝
I'm responding because I see the message as a response to me. I feel like an hour or two of my life has been wasted. 🥺 At least, I hope it will be helpful to a few people who read it. 🙏
I don't know why I wrote this long, but I think the words "Maybe you haven't heard about the smart contracts and the Bitcoin Defi based on that" got me fired up =) Don't do it my friend, it's not wise to make such bold statements without knowing who you are talking to. At least try to ask and learn before judging. 😵
I'm a multi-disciplinary hardcore & oldschool coder with nearly 25 years of professional experience (excluding amateur periods) and I have worked in many areas such as crypto, security, etc. before the
#Bitcoin came out. I've been interested in cryptocurrencies since 2011. In other words, I know very well what smart contracts are, as a technical person and developer who has experienced the entire process development live.
First of all, you may or may not trust a project, but the "trade-focused" analyses I share here are completely independent of this. A trader does not need to trust the project to trade, trading is two-way and you can trade in any parity by considering the time period and risk management. Some people are trying to judge or criticize by looking at a single post they come across without realizing this, and I find this meaningless.
Although the price of a coin reaches certain levels with hype during the hot periods of the cycle, the path it will follow in the long term in the future is determined by many parameters such as supply, tokenomics, past behavior towards its investors and developers, the desirability of the network and therefore its income generation potential, etc.
Retail users who have experienced past cycles have many negative experiences with
$ADA , and past investors still remember these periods with anger. Because they know very well how the newly increased supply was dumped on them in their most difficult times. For this reason, neither the coin nor its founder and management team are well remembered by this user base.
When I first started sharing on social media, I made a few criticisms based on these past experiences and made fun of them, even though they tried to make me forget the past.
I could write a lot about why founder Charles Hoskinson was not a very controversial and unwelcome character in the past, but that would be a much longer post than this one. So those who are curious can check out past discussions and articles/videos by searching Google.
Let me get back to the main topic without getting too off topic.
Cardano known for its innovative features and scientific approach, has also encountered criticism and setbacks that caused frustration among users, investors, and developers over time. Here are some key issues that led to discontent within the community:
👉 Slow Development Process
Cardano followed a "research-first" development approach, where every update undergoes rigorous academic scrutiny and testing. While this ensures robustness, it has significantly slowed down the development process compared to competitors.
Users and investors often grew impatient, especially as competitors like
#Ethereum (
$ETH ) and
#Solana (
$SOL )rolled out new features more quickly. Delays in delivering promised features strained confidence in the project.
👉 Slow Growth of the DApp Ecosystem
Despite positioning itself as a smart contract platform, Cardano lacked a functioning decentralized application (DApp) ecosystem for years. Smart contract functionality only became available with the Alonzo upgrade in September 2021.
Many developers and users turned to platforms like Ethereum, which already had a mature DApp ecosystem. The lack of usable applications hindered adoption and enthusiasm for the platform.
👉 Technical Complexity and Developer Accessibility
Cardano’s infrastructure is technically complex, relying on Haskell, a programming language that is less widely used and more challenging to learn.
New developers and less technical users often struggled to interact with the platform, pushing them toward more developer-friendly alternatives.
👉 Centralization Concerns
During its Initial Coin Offering (ICO), over 60% of ADA tokens were distributed to Japanese investors, raising concerns about decentralization.
Questions about the fairness of token distribution created skepticism within the community and among investors.
👉 Marketing and Communication Gaps
Cardano’s communication style, heavily focused on technical and long-term goals, often failed to engage or resonate with short-term-focused retail investors.
This approach alienated users looking for immediate updates and tangible progress, making it harder for Cardano to maintain momentum in a fast-paced crypto market.
👉 Growing Competition
Cardano aimed to position itself as an alternative to Ethereum but faced stiff competition from platforms like Ethereum’s Layer 2 solutions (e.g., Arbitrum, Optimism) and rival blockchains like Solana and Binance Smart Chain, which offered faster ecosystems.
Cardano's slower adoption and lack of DApps made it harder to compete effectively in a crowded market.
👉 Criticism of Stake Pools and Reward Systems
Cardano’s Ouroboros consensus mechanism received criticism for favoring large stake pools over smaller ones in its reward distribution system.
Smaller stake pool operators argued that this dynamic conflicted with Cardano’s commitment to decentralization.
👉 "Overpromise and Underdeliver" Perception
Cardano’s founder, Charles Hoskinson, often made ambitious claims about the project’s potential (e.g., revolutionizing finance in Africa). However, many of these promises have yet to materialize meaningfully.
This created an image of overpromising and underdelivering, particularly among investors expecting quicker results.
👉 Tokenomics and Price Volatility
Cardano’s price has experienced significant volatility, driven largely by speculative investments rather than ecosystem adoption or real-world usage.
Large price swings sometimes discouraged long-term investors and overshadowed the project’s technological advancements.
How about when we look a little further into the present day?
Cardano continues to face some of the challenges it encountered in the past, alongside new issues that have emerged recently. Here’s an updated overview of the situation:
👉 Technical Complexity and Developer Accessibility
Cardano’s technical complexity and developer accessibility have been longstanding concerns, primarily due to its reliance on less commonly used programming languages like Haskell and Plutus. These factors have created a steep learning curve for some developers. However, in recent years, several initiatives and tools have been introduced to address these challenges and improve the developer experience.
New tools and development environments have made building on Cardano more approachable. However, compared to other platforms, Cardano still needs continuous improvements to further enhance its developer-friendly ecosystem and remain competitive.
👉 Competition and Market Position
Cardano continues to compete with platforms like Ethereum and Solana, which are advancing rapidly.
To maintain and grow its market share, Cardano needs to deliver innovative solutions and expand its ecosystem. Otherwise, it risks losing relevance in an increasingly competitive landscape.
👉 Ecosystem Growth and Adoption
While Cardano has made progress in decentralized applications (DApps) and smart contracts, there is still room for improvement.
The platform needs to attract more developers and users by expanding its ecosystem and offering more practical use cases. This is essential for widespread adoption.
👉 Network Usage
Cardano has made efforts to enhance its ecosystem and improve smart contract capabilities in the past year, but there have been declines in network activity and transaction volumes. As of December 2024, there has been a noticeable decrease in transaction volumes, indicating reduced investor interest.
Throughout 2024, Cardano saw declines in network activity and transaction volumes, indicating reduced investor interest.
👉 Increase in Total Value Locked (TVL)
As of November 2024, Cardano's DeFi ecosystem saw a 19% increase in its TVL. This growth is attributed to the increasing adoption of decentralized applications (dApps) and staking mechanisms on the platform.
In January 2024, Solana's market cap was $35 billion, with a TVL of $1.9 billion, while Cardano's market cap was $16.5 billion, and its TVL was $328 million. This data shows that Solana is in a more advantageous position in terms of liquidity and platform usage.
Also, when I look at the on-chain data below, I evaluate that the network value is not keeping pace with the usage of the network.
👉 Whale Movements and Price Pressure
Recently, there has been a noticeable decline in large investor (whale) activity within the Cardano ecosystem.
According to IntoTheBlock data, the net inflow of ADA held by whales has dropped by 90%. This metric makes it clear that whales are cashing in. The math is simple: large wallets with more than 0.1% of the supply are selling faster than they are buying, and such selling cannot go unfulfilled.
👉 Can Cardano Gain Hype Under a New Trump Administration?
Cardano’s prospects under a new Trump administration will depend on broader crypto market dynamics, regulatory policies, and its ability to innovate. Reduced regulation or increased interest in blockchain technology could work in its favor.
I observe that the new management may give more priority to US-based projects in particular, and the founder seems to be trying to enter into various joint efforts with the new management to turn this to his advantage.
However, its ability to fully overcome past issues and capitalize on new opportunities will hinge on the project’s internal developments and strategic execution.
While Cardano has seen some positive developments in its DeFi ecosystem, there have been declines in overall network activity and investor interest. Compared to its competitors, it is falling behind, especially in terms of market cap and TVL. This suggests that the platform needs further development and adoption efforts to enhance its competitive edge.
Cardano, despite its innovative and robust design, has faced criticism for its slow progress, ecosystem limitations, and perceived lack of delivery on its promises. These challenges have led some users, developers, and investors to shift their attention to faster-moving or more accessible blockchain platforms. However, many still believe in Cardano’s long-term vision and its potential to deliver on its ambitious goals.
To be clear, I am not a spot holder in Cardano and I think there is very little that can change that, but from a trader's perspective, I explained what I think in the introduction. Give me a chart with enough liquidity and I can trade anything.