Cardano Ecosystem (ADA) – A Step Towards DeFi Space Using Smart Contracts
What is outstanding about the Cardano (ADA) ecosystem? What projects are there inside this ecosystem? Learn about investment opportunities with Cardano (ADA)!
Cardano is one of the big brothers of the crypto market when it was developed by the co-founder of Ethereum in 2015 until its official launch in 2017.
Nowadays, Cardano is not talked about much anymore, but it is still Ecosystem ranked top 5 Marketcap of the whole market.
So in this overview of the Cardano ecosystem, I summarize the most important information about Cardano as well as forecast investment opportunities in the Cardano system in the future.
Cardano Blockchain Overview
What is Cardano?
Similar to Ethereum, Cardano is an open source, decentralized blockchain that allows developers to create smart contracts on the network to deploy applications without having to worry much about security and extend.
Cardano blockchain was founded in 2015 by Charles Hoskinson – co-founder of Ethereum and BitShares.
In 2017, Cardano successfully raised $60 million through ICO. This is a very large number showing that the community places great trust in Cardano.
Cardano (ADA) token information updated on September 20, 2021:
- Marketcap: $66 billion.
- FDV: $93 billion.
- Rank: #3
- ATH price: $3.09 (September 2, 2021).
- ATL price: $0.017 (October 1, 2017).
- Circulating Supply: 32,140,000,000 ADA (71/100%).
- Total Supply: 45,000,000,000 ADA.
- ADA list exchange: Binance, Huobi, Kucoin, Gate, Coinbase, OKEx,..
The exchanges listed Cardano ADA. Source: Cardians.
Information about Blockchain Cardano updated on September 20, 2021:
- TPS: 250-1000.
- Blocktime: 20s.
- Total Tx: 8,500,000 Tx.
- Avg. Tx fee: $0.2.
Number of Dapp builds on Cardano
Currently, Cardano is still in the process of finalizing the Smart contract and launching the Mainnet version for the blockchain.
Therefore, the Dapp that wants to develop on Cardano’s ecosystem has not yet been able to build on Cardano’s blockchain but still has to wait, I will mention more specifically in the Cardano roadmap below.
Partners & Backers
The organization behind the Cardano ecosystem. Source: Cardians.
Currently, behind the Cardano ecosystem are 3 organizations Cardano Foundation, Emurgo and IOHK.
The three organizations above did not disclose much information about the role for Cardano, the information was only revealed briefly that they are the financial and blockchain technology organizations that have supported Cardano from the beginning to the present time.
In addition, the community also knows Cardano a lot through Charles Hoskinson, he is the co-founder of Ethereum and has been developing Cardano since 2015 (officially launched 2017).
Cardano Ecosystem Highlights
ADA – Cardano’s native token is a token in the top 10 of Marketcap, although it is not widely used in DeFi.
The number of tokens staking accounts for 70% of the circulating supply, showing that the community strongly believes in the future of Cardano.
Cardano is a visionary organization that focuses more on real-world applications than in the blockchain and DeFi space.
Cardano’s current picture and roadmap
Roadmap of the Cardano ecosystem.
Cardano outlines 5 stages for their roadmap and is broken down by the following timeline:
- September 2017: Bryon – Foundation Phase: This is the stage where the Proof of Stake (PoS) trading network is developed, allowing ADA tokens to be traded and stored. This is also the period when IOHK launched Daedalus wallet and Emurgo launched Yoroi wallet, up to now, these are also the two most used wallets in the Cardano ecosystem.
- 7/2020: Shelly – Decentralized Phase: This is the period when Cardano begins to decentralize its network by allowing many individuals and organizations that can staking ADA to become Validator, this will help Cardano network increases security and reach more users.
- 3/2021: Goguen – Smart Contract Phase: This is the current stage of Cardano, Cardano intends to develop and launch a Smart contract that allows dApps to operate on the Cardano network, however this phase is in progress. Due to the delay, many projects with a vision to develop on the Cardano ecosystem have not been able to launch products or have to use the Ethereum network instead.
- Future: Basho – Scaling Phase: During this phase, Cardano will introduce sidechain network with sharding mechanism to scale network capacity without compromising on security factor.
- Future: Voltaire – Decentralized Governance Phase: During this phase, decentralized governance will be applied. Any user holding ADA can participate in proposals and vote on proposals from the community.
Cardano’s DeFi Space Development Effort
Like other ecosystems, Cardano is equally focused on DeFi. To attract developers to the ecosystem. Cardano is having 3 programs to expand the DeFi space, including: Project Catalyst, Cardano Developer Portal and cFund.
Project Catalyst is considered the program with the greatest merit to help attract developers and expand the DeFi space in the Cardano ecosystem.
Project Catalyst acts as a global forum for developers in the Cardano ecosystem, allowing them to present their ideas, get support from Cardano advisors, and then receive awards and grants capital from supporters.
Highlights from the Project Catalyst event.
Up to now, they have held to the 6th season, with each passing wave, the number of wallets used to vote for contestants in Project Catalyst increases. This shows that Cardano is an ecosystem that attracts a lot of Active Users – this is the premise for the development of the DeFi space later.
Projects receive funding from supporters.
Above are the top 7 candidates with the highest number of Support votes in Project Catalyst Fund 5. To be able to win the award from Project Catalyst, projects will be voted by ADA holders.
If the project receives more Support votes, the project will have a higher chance of receiving prizes, as well as receiving funding from supporters according to their required budget.
Number of ideas contributed to Project Catalyst over 6 seasons.
After each Project Catalyst round, the number of attendees and the number of ideas submitted to the final round will increase significantly.
Project Catalyst taking place in August 2021 attracted more than 814 ideas, of which 150+ ideas were funded and $4 million distributed through $ADA.
Cardano Developer Portal
The Cardano Developer Portal is not a contest, but it is the program that has the greatest role in guiding developers who are unfamiliar with the Cardano ecosystem to easily approach and build products on Cardano.
Cardano Developer Portal’s 6 stages of project implementation on Cardano.
In it there will be 6 stages:
- Get Started: Understand concepts, technical issues, development tools.
- Integrate Cardano: Integrate the already built product into the Cardano network.
- Metadata Building: Understanding Metadata, the data in the process of trading and executing orders.
- Discover Native Token: Learn how to design tokens, NFT tokens and understand why they don’t need Smart Contracts.
- Project Funding: Explore the Project Catalyst program to leverage Cardano’s resources and the power of the crowdfunding community.
- Stake Pool Operate: Learn how to build a Cardano Staking Pool and how to operate media to attract delegators.
These are the 6 very important steps of a development project in the Cardano ecosystem. Below I will have case studies of some projects that are applying the direction that Cardano Developer Portal has proposed.
cFund is the result of the cooperation of 3 organizations, including Wave Finance, IOG and Cardano Foundation. cFund will operate independently of Project Catalyst.
However, they all have the same goal of trying to expand Cardano’s influence and application to all markets, not just the DeFi market.
Wave Financial is a financial institution managing assets up to 500 million USD, they will try to both invest and direct development projects.
Up to now, cFund has poured capital into 7 outstanding projects such as OccamFi (Launchpad), Coti Network (Payment platform),…
cFund investment fund and invested projects
The EMURGO Fund is a $100 million investment fund established by the Cardano Foundation and EMURGO – a longtime Cardano companion.
Currently, they have invested in 3 projects, although not directly impacting DeFi, this demonstrates Cardano’s efforts in catching up with the stimulus packages of the ecosystems. For example: BSC $1 billion, Avalanche $400 million, Celo $100 million,…
Pieces of the Cardano ecosystem
Before diving into each piece of the Cardano puzzle, I will take a look at the market overview after 4 months of development in the crypto market.
Below are two comparison photos of Cardano integration and collaboration projects in May 2021 and September 2021.
Overview of the Cardano ecosystem in May 2021
Overview of the Cardano ecosystem in November 2021.
Looking at the image above, you can see that Cardano’s universe has expanded very strongly, from about 50 projects in May 2021, until November 2021, Cardano has a collection of up to 200+ projects Widely covered in many different areas such as DeFi, AMM Liquidity, Lending, Stablecoin, NFT, Wallet,…
If it’s not an exaggeration, Cardano has enough collections to fill the DeFi Stack. If there is a reasonable development direction, Cardano can completely create an ecosystem that is not inferior to Fantom or Avalanche at the present time.
Bridge is one of the most important areas for a new ecosystem to develop. Bridge will act as a bridge allowing money to flow easily between ecosystems, more specifically, from large ecosystems to smaller ecosystems.
Cardano and the Nervos blockchain collaborate to develop a bridge between the two networks.
Understanding this problem, Cardano and Nervos developed a Bridge between two blockchain networks, allowing users to easily transfer Cross-chain assets between the two blockchains.
However, linking to the Nervos blockchain really doesn’t bring much value to the two platforms. Because the capitalization of the DeFi market mainly still comes from the Ethereum ecosystem and CEX exchanges.
The good news is that in early December 2021, Singularity made the first move to help move AGIX tokens from Ethereum to Cardano as a Testnet.
This opens up hope that many other assets can be easily used on the Cardano network as the BSC system is doing to attract assets to the BSC system.
Ardana – DeFi hub on Cardano has announced that it is developing a bridge to help move assets from the Near system.
Wallet platforms in the Cardano ecosystem.
If in June 2021, Cardano was only supported by 5 Wallets, Cardano is now supported up to 19 Wallets, which also reflects the need to store and use the ADA token is increasing significantly.
The wallet is also a bridge that helps ADA holders to buy ADA from CEX exchanges, then withdraw from CEX to non-custodial wallets to use them in the DeFi space later. Therefore, the development of the Wallet field also creates a significant motivation for the Cardano system to attract more users.
For any DeFi ecosystem to grow, they need the presence of Stablecoins. Stablecoins are the exchange asset as well as the liquidity-boosting asset of a strong growth system.
With a close relationship with Coti Network, DJED Stablecoin was born under Cardano’s partnership with Coti. Currently, DJED has not been applied, but promises to be widely used if Cardano “leverages and prioritizes” DJED over USDT or USDC.
AMM Liquidity Platforms on Cardano.
In order to grow in the DeFi space, AMM Liquidity and one of the most important areas help keep the cash flow in the ecosystem. Thereby creating a premise for the development of higher layer projects. For example, Yield Aggregator will work on multiple Liquidity Pools.
Classified by potential level and level of product perfection:
- Regular operation, sample products: Minswap, Sundaeswap Daemon Exchange.
- Planned: Ardana, Cardax, ADAX…
- Nothing but website: Polyswap, Pharo,…
Cardano’s NFT array has many projects involved, but they only work one way, that is to sell but there is no Marketplace to trade those NFT assets, so the projects in the NFT array are very active sporadic.
Several NFT projects on Cardano.
Around July 2021, Cardano partnered with Wolfram to launch Liveminting – an NFT platform for creators and artists, but currently they do not have official products.
Cardano and Wolfram collaborate to build the NFT Liveminting platform.
What is the future development direction of Cardano?
From Alonzo Testnet to Plutus Smart Contract
Cardano has been planning to launch a Smart Contract for a long time.
However, due to technical reasons, they postponed the whole year. It was not until June 2021 that Cardano announced that it had successfully developed Alonzo Testnet – this is a test version for developers before launching the Mainnet.
Cardano announced that it will launch Mainnet on September 12, 2021.
Until September 12, 2021, Cardano officially launched Smart Contract for developers in the ecosystem.
Only in a short time, specifically 8 days later (August 20, 2021), the number of Smart Contracts built and tested on Cardano has reached 115,000 Smart Contracts.
Although this is not much, it shows that Cardano has made great strides and the developers in the Cardano system are also extremely active in developing products on Cardano.
The Charli3 Oracle project has published the first code snippets on Cardano.
The number of Smart Contracts deployed on the Cardano blockchain reached 882 projects at the beginning of December.
This is a small number compared to other ecosystems, but it is also a positive sign that some projects have started building on the Cardano blockchain. Typically Minswap, Sundaeswap,…
What is the Initial Stake Pool Offering and how does it affect the Cardano system?
Currently, Cardano has a Smart Contract, a strong community is not lacking. But how will Cardano choose to approach and deploy DeFi Ecosystem?
From a personal perspective, it would be “Initial Stake Pool Offering (ISPO)”. This is the form in which the ADA holder will stake $ADA in the Staking Pool of the development team and receive the native tokens of that project in return.
This is a pretty good direction for Cardano that has been adopted by many ecosystems and platforms in DeFi. Before going to any platform, I will answer the question: “Why is it successful?”. Here are some advantages that ISPO brings:
- Attract users to create value (Stake ADA) to receive native tokens in return ⇒ Attract ADA holders to join DeFi.
- The prestige and potential shown in the ADA number is Stake ⇒ Filter out “scam” projects from the perspective of the whole community.
- Create motivation to buy ADA to stake, increase applications for ADA ⇒ Create growth momentum for ADA.
Which ecosystems and platforms are adopting this mechanism?
- Terra Ecosystem: Stake LUNA to MIR, ANC,…
- Near Ecosystem: Metapool for Stake NEAR to get META.
- Solana Ecosystem: Sunny Aggregator and Saber allow Stake SOL to receive SBR, SUNNY.
- Polkadot Ecosystem: Stake DOT or KSM to receive the project’s native token.
- Tron Ecosystem: TRX holders regularly receive Airdrops of BTT, WIN, and JST.
In general, they have been very successful because they create events between projects in the ecosystem, as well as create incentives for users to use ADA in the ecosystem.
Notable ISPO Platforms
Platforms that have an Inital Stake Pool Offering program.
AMM DEX has a Testnet for trial users, you can Claim test tokens to experience Minswap. Minswap has quite a few Stake Pool partners and has raised over 106 million USD ADA.
Minswap AMM DEX.
MELD is a project operating in the field of DeFi, allowing users to borrow or lend to Earn more from the market. They have attracted over 300 million $ADA. This is the largest number for projects applying ISPO.
MELD – platform operating in the field of DeFi.
Ray Network acts as a DeFi Station, taking it very seriously. Ray Network was originally Ray Wallet and has developed Swap, NFT, Launchpad, Graph & Data and many more features. They also have now attracted over 95 million $ADA.
Ray Network – DeFi Station on Cardano.
Sundaeswap is an AMM DEX similar to Minswap. Although they haven’t released the Testnet yet, this is an active team. They regularly update the activities on Twitter as well as the direction of the development of Cardano. You can follow them.
Sundaeswap – AMM on Cardano.
MIRQUR is a project operating in the DEX field, they will have an Airdrop for individuals who Stake into MRQR Pool to receive MRQR in the future. Currently, MIRQUR has attracted more than 24 million $ADA. However, MIRQUR still has no clear product.
MIRQUR – DEX on Cardano.
Projecting the future of the Cardano system
In order for the Cardano ecosystem to grow, I will give some personal perspectives below:
- Cardano needs to complete the Testnet and Mainnet of the Cardano blockchain so that projects can deploy their projects to the smart contract.
- The DeFi market has come a long way, in order to shorten development time, Cardano should find ways to partner with projects with great potential instead of rebuilding from scratch.
- Implement programs to attract developers to build platform projects: Lending, Stablecoin, Synthetic Asset,…
- Currently Cardano is having a Centralized section on Infrastructure projects, they need to decentralize the Cardano blockchain – this is a mandatory condition if they want to attract good developers.
In terms of potential and supportive community, the Cardano ecosystem is not inferior to any system, even slightly better.
However, in order for Cardano to catch up with other systems in terms of DeFi cash flow, Cardano needs to accelerate further in Smart Contract development and Mainnet launch.
To attract developers, Cardano has Project Catalyst (Idea Scale), which is the largest incubator for new projects and ideas. Currently, they have attracted more than 25,000 attendees and have implemented the project at a basic level.
However, the projects are still not really outstanding. I will update you as soon as possible when there are latest updates about Project Catalyst.
Investment opportunity in the Cardano ecosystem
Currently Cardano has not launched the Mainnet, so it can be said that Cardano’s ecosystem is still quite lacking in terms of DeFi.
Invest in tokens (ADA)
Since 2017 until now, although there has not been much in the crypto market, Cardano has always stood among the highest capitalization tokens.
This shows that the community that holds Cardano is very large and they still believe in the development of Cardano in the future.
However, to invest in ADA, you need to have a reasonable entry point. At the moment, although the price of ADA has fallen from its peak, it is still a price that has grown by more than 1,000% since the beginning of 2020.
ADA had a long period of accumulation before its strong growth reached its current price. Brothers investing in ADA at the moment should note the Profit/Loss ratio.
Invest in other tokens Cardano
Currently ADA is almost the only and most prominent token. Other tokens have a Cardano vision but are still primarily deployed on Ethereum. You can learn more about Cardstarter (CARDS), Charli3 (C3), OccamFi (OCC),…
In addition, there are still other projects that have not yet issued tokens such as Liqwid Finance (LQ), Cardswap (CSWAP), Ray Wallet (XRAY), Yayswap (YAY),… Those interested can read about the projects this project on idolmeta.net !
Cardstarter OccamFi is the most active IDO Platform in the Cardano ecosystem today, specializing in launching projects with a vision to develop on the Cardano blockchain.
This is one of the ways to help you make a profit with low risk if you find a good project.
ADA tokens can be staking at the Validator Nodes of wallets that support the Cardano blockchain such as Dandelous, Yoroi, and Ray Wallet. These are three non-custodial wallets that support ADA staking brothers with an APR of about ~5%/year.
Or you can Stake ADA into projects that implement the Initial Stake Pool Offering I mentioned above to receive the project’s native token.
I will summarize some of the main points through the outline below:
- Cardano ecosystem has great potential and community support ⇒ Shown by the number of staked tokens accounting for 70% of circulating supply and the top #4 Marketcap of the market.
- Cardano ecosystem needs to cooperate with projects with great potential to expand Multichain to Cardano. Especially focusing on key areas such as Lending, Synthetic, Stablecoin, Bridge,…
- The opportunity to invest in ADA token has long passed. At the moment, the risk-reward ratio is disproportionate, the investment position is no longer good, unless Cardano makes the next development move.
Following the development of Cardano, I see that they are still developing steadily. However, Cardano places more emphasis on social activities. That’s why I haven’t seen them pay too much attention to DeFi and the cryptocurrency market.