Cardano drops out of top 10 cryptocurrencies by market cap
Once a staple in the top 10 cryptocurrencies, Cardano has now slipped out of the top 10 by market capitalization.
For those who have been monitoring Cardano (ADA) closely,this may not come as a surprise, as the cryptocurrency has been facing significant challenges due to increasing competition and slow adoption rates.
Cardano’s decline can be attributed to its reliance on off-chain components that undermine its decentralization, low network activity compared to peers like Ethereum (ETH) and Solana (SOL), and its inability to keep pace with faster, more active competitors.
The price of Cardano peaked at $3.09 in September 2021 but is now trading at $0.33. At that time, Cardano’s market cap flirted with the $100 billion market, but now stands just shy of $12 billion.
Market cap is often used to compare the relative size and importance of different cryptocurrencies. Generally, cryptocurrencies with higher market caps are considered more established and less volatile than those with lower market caps.Â
What went wrong with Cardano?
Cardano has struggled to achieve significant adoption due to competition from Ethereum and the rise of Layer 2 solutions, which have diminished its unique advantages. Despite increased development activity, many projects within its ecosystem have failed to thrive, leading to low user engagement and overreliance on the ADA token.
Cardano’s smart contract functionality also faced scrutiny over the years due to its reliance on off-chain components, which contradict the principles of true decentralization.
Developers have highlighted potential risks, including the possibility of user funds being trapped during disruptions and the challenges of maintaining custom solutions. Despite its strong technological foundations and smart contract capabilities, Cardano’s network activity remains low compared to its peers, leading to its drop in market cap.
Over the years, Cardano has been outpaced by more active networks, impacting its development and overall market position.
Cardano developments
Recently, Intersect called on decentralized application projects using Cardano to accelerate their preparations for the upcoming Chang Upgrade #1.
The upgrade, set to introduce on-chain governance, is crucial for advancing Cardano toward a fully decentralized system. More than 80% of Cardano’s stake pool operators have already upgraded to the latest validator node, but exchanges and decentralized apps still need to follow suit.
Cardano’s declining position may indicate a loss of investor confidence as it grapples with reduced trading volumes and market interest. However, a potential recovery isn’t off the table if Cardano can boost its ecosystem and regain momentum.
