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Metrics Show That Cardano Network is Advancing Despite ADA’s Worrying Run

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Hoskinson's project, Cardano, has seen its fair share of wins and losses since it entered the blockchain space. Critics and investors alike have picked the network to pieces in the past because of its failure to reach the potential many had in mind.

Although its native token has had occasional spells suggesting it is making a comeback, it has predominantly slacked. This has been made worse by the fact that its competitors don't appear to be slowing down. The rise of Layer 1 rivals like Solana, Avalanche and Terra as well as Layer 2 protocols like Polygon has pushed Cardano into the shadows.

Once hailed as the most promising Ethereum alternative, Cardano has sunk into great depths – literally. Its token ADA has gradually fallen off from third in market capital as recently as last September to seventh at present.

Are the concerns and worries justified?

Despite suffering this decline, the Cardano ecosystem has always seemed to have something going on. Last year, the network launched the Alonzo upgrade that brought smart contract functionality. The upgrade was expected to have a massive influence on the value of ADA, but that wasn't the case.

Late in December, Cardano founder Charles Hoskinson revealed several developments pertaining to the protocol's path this year. A number of those developments have already been seen, while others are in the pipeline. Still, the impact of the recent developments hasn't been all that great.

Even as Cardano finds itself in such a difficult position yet again, some of the network's statistics show that the network is not yet done. On the contrary, it is now reaching new heights, which could help unleash its potential and unlock the value of its token.

Here are three metrics that prove Cardano is still in the race for dominance among smart contracts platforms:

Transactions are scaling new heights

The total number of transactions on Cardano has been steadily rising since the turn of the year.

In what counts as the most significant milestone of the year, the blockchain eclipsed the 30 million mark on 4th February. Cardano blockchain insight on Google Data Studio shows that this figure is currently $30.67 million. So far this month, a total of 1.283 million transactions have been completed on Cardano.

The total number of transactions on Cardano. Source: Cardano Blockchain Insights

This milestone doesn't come as a surprise, as market analysts and Cardano executives predicted a surge in network activity fuelled by increasing adoption. Last week, Cardano development company IOHK announced an 11% block size increase to bump up the network capacity.

Wallets numbers

Cardano wallets have equally been increasing and crossed 3 million on 3rd February. There are 3.035 million ADA wallets at press time, Cardano Blockchain Insight shows. While this figure is just short of the ‘expected' number, it still represents a huge milestone for the blockchain in terms of adoption.

The number of ADA wallets. Source: Cardano Blockchain Insights

As there were 2.666 million wallets at the start of the year, the rate of increase in the number of wallets since then stands at about 8,794 per day. This metric, however, doesn't paint an accurate picture considering some users own more than one wallet. Nonetheless, it is an indication of growth in the Cardano network.

Smart contracts and TVL on the rise

Cardano enabled smart contract with the Alonzo update in September last year. Not far off from the hike in ADA wallets, the network has also seen an increase in the number of smart contracts. So far, there are more than 1,300 Plutus-based smart contracts on the blockchain, data shows.

The number of smart contracts on Cardano. Source: Cardano Blockchain Insights

This figure remained below 1,000 for the better part of January before seeing a sharp rise on 30th January. The growth briefly halted at the start of February before picking up the pace and shooting again. In February, so far, this count has increased by 177.

Meanwhile, the total value locked has been on an uptrend since 3rd February. DeFi Llama data shows that Cardano TVL is at its highest ever.

Cardano TVL chart. Source: DeFi Llama

This figure has increased from $72 million eight days ago to $101.32 million as of writing, translating to a 40% upswing. Sundaeswap, the recently launched decentralized exchange, has a 96.77% dominance.

Cardano, however, lags when compared to other chains in the DeFi ecosystem. Ethereum, the DeFi leader, currently has a TVL north of 127 billion. Terra is a distant second with roughly $14.5 billion – an eight of Ethereum's figure.

Becoming an all-round blockchain

Towards the end of last year, Cardano started actively floating NFTs, and several exciting projects have cropped up since. This is positive as it puts Cardano on the map where players like Ethereum, Solana and Polygon are already miles ahead.

The metrics above dispel the postulations that Cardano has been stagnant for years. It is evident that Cardano is advancing – though not as favorable as critics and many in its community would want. Nonetheless, it will be exciting to see the trajectory Cardano and its native coin trace this year.

To learn more about Cardano and its token visit our Investing in Cardano guide.

Sam is a financial content specialist with a keen interest in the blockchain space. He has worked with several firms and media outlets in the Finance and Cybersecurity fields.