This is why Cardano (ADA) may be a major player in 2022

Cardano (ADA) may be a major player in 2022

Prominent cryptocurrency exchange Kraken has revealed in its report  that the current price movement of Cardano (ADA) combined with its daily trading could be a bullish indicator.

Cardano was brought back to life with the Shelley hard fork in July 2020, a full 3 years after the blockchain’s debut, and saw a massive surge, holding a strong position in the top 5 crypto assets by market cap for much of 2021.

While the price of ADA  is significantly related to the volume of network activity, according to Kraken research, this has not been the case since late 2021, when the price of Cardano failed to keep up with the surge in trading. daily transactions.

Cardano’s strategy and attitude are considerably different from its L1 contemporaries, which could give them a competitive edge if developments go well. Importantly, Cardano is a value-driven project that prioritizes community governance, academic peer review, and high-security development.

The Kraken team sure is bullish on Cardano. The reason for their beliefs is explored below. 

Cardano (ADA) may be a major player

Cardano Ouroboros Update

Ouroboros is a Cardano -based blockchain technology that uses Nakamoto-style consensus, similar to Bitcoin, in which nodes agree following the “longest-chain rule.” Unlike Bitcoin’s PoW process, which relies on hashing power or energy to generate new blocks, Ouroboros leverages the network’s token (i.e. ADA) to influence how often a node is chosen to generate new blocks. blocks. 

In addition to security, Ouroboros’ design improved performance compared to Bitcoin and Ethereum (7 TPS and 15 TPS, respectively), reaching up to 257 TPS on the base layer in early tests.

Also, a hack mechanism is not required in Cardano due to the nature of the Ouroboros protocol. As a result, delegators’ staked money is not at risk of being seized by the SPO or the network.

Users can continue to delegate their ADA to their preferred SPO from smart contracts, which is a unique feature of Cardano.

Extended UTXO model 

Cardano’s accounting model, which refers to how transactions are processed and how wallet/account balances are maintained and updated, is one of the features that sets it apart from most other smart contract platforms. 

The capabilities and benefits of the UTXO paradigm attracted the IOG team to Cardano, but they also wanted to keep the programmable smart contract functionality of Ethereum. As a result, Cardano uses the extended UTXO model, which is an expansion of the Bitcoin UTXO paradigm that allows the use of smart contracts.

The EUTXO model allows users to pay network transaction fees in any user-defined token (eg USDC, wBTC, wETH) instead of ADA, which IOG refers to as babel fees.

Concerns about dApps

IOG is creating Marlowe, a Plutus-based smart contract language exclusively for financial contracts and designed to be used by financial contract professionals who do not have programming skills, to address concerns about the dApp community. 

Cardano’s founding organizations have also partnered with third-party development firms such as Five Binaries and Runtime Verification to accelerate the development of supporting infrastructure and make smart contract development on Cardano accessible to developers of any language, including Solidity, C++ , Rust, and Java.

Cardano Web3 Developments

Cardano’s Web3 ecosystem is currently in the early stages of development. Despite this, the network hosts a diverse set of projects. Cardano’s mainnet has yet to see many dApps go live, though smart contracts did go live as part of Alonzo’s hard fork in September 2021. Cardano’s first DEX, MuesliSwap, went live earlier in the day. January 2022, and the highly hyped DEX, SundaeSwap, debuted as a beta version of its DEX on the network as recently as January 20.

Part of the reason for the delay in dApp adoption on Cardano is the paradigm shift brought about by the EUTXO model. To accommodate the UTXO architecture, developers need to rethink the core logic of many dApps, such as how to build a liquidity pool for a DEX.

Another major reason for the dApp delay is that the developers are waiting for the Plutus Application Backend (PAB) to be released. PAB is not essential for dApps to get started, but it does provide a foundational set of infrastructure for developers to implement basic dApp capabilities, including back-end wallet infrastructure and blockchain interaction. PAB also makes testing easier and speeds up dApp development.