While Bitcoin and Ethereum still hold the top spots on the crypto leader board, Cardano (ADA) was the top performer in terms of percentage gains, with a staggering 560% return in Q1. It is now the No. 5 cryptocurrency by market capitalization, according to Messari data.
ADA is the native token for the smart-contract blockchain Cardano, and its value tripled in February as traders bet on the success of the so-called “Ethererum Killers.” Ethereum as you know dominates the smart contract space and currently most DeFi projects are on its blockchain. This February success was followed by Coinbase exchange listing ADA in March, making it available to both institutional and retail members.
Significantly, Cardano became a multi-asset chain following its hard fork on 1st March this year, Named ‘Mary’, the hard fork allows users to create tokens that run on Cardano natively, just as ADA does. This is something that sparked a great deal of interest in Ethereum. When it enabled new tokens to be made on its platform, it was one of the first big use cases that caught on for Ethereum. It also made possible 2017’s multi-billion dollar initial coin offering splurge.
Enabling new tokens is a step on the path to full smart-contract functionality, so no wonder Cardano’s CEO Charles Hoskinson called the hard fork “historic.” Hoskinson, who founded IOHK, which runs Cardano, was an Ethereum and BitShares co-founder.
And, on 3rd April, IOHK announced that a further milestone had been reached with the Cardano blockchain now completely decentralized. This means that the community, or the network’s 2200 stake pool operators, are now exclusively responsible for block production on the network. To put this in perspective: Bitcoin’s blockchain, “is largely in the hands of the ten most prominent Bitcoin mining pools, which account for 85% of the network’s block production,” Samyuktha Sriram reports at Yahoo! Finance.
Do the numbers matter? Yes. Diversifying the block production across a larger number of people increases the security of the blockchain. It’s a big part of the argument for decentralisation. Cardano’s product director at IOHK, “Achieving decentralization of block production is significant not just for Cardano but also the wider blockchain industry.” The next steps for Cardano will be decentralization of the other two elements – governance and network. The governance is already in the pipeline with IOHK’s Project Catalyst, an $80 million fund that was funded by the community, which in turn votes on proposals for the improvement of the network.
Whilst Ethereum tends to dominate DeFi news, Cardano’s success in 2021 suggests that it is going to be a strong player in the smart contract sector. If you haven’t considered buying Cardano’s ADA before, perhaps now might be the right time to dip your toes in.