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An analysis of Cardano (ADA)

01 September 2021 | ZebPay Trade-Desk

Cardano (ADA) is positioned as a blockchain POS platform that allows the development of decentralized applications and smart contracts with modularity, it is designed to ensure that owners can participate in the behavior of the network as a means of administration. The largest chains have successfully implemented the blockchain POS mechanism.

In 2020, the protocol underwent a Shelley update to further expand its infrastructure and enable better integration of decentralized applications (DApps). Since then, ADA’s growth has been impressive. ALANZO announcement happened on August 6, 2021, and since then the prices of Cardano have been rising which became the highest on the 23rd at $2.92. The price on that day was $1.40, the next day it was $1.47 and the market cap was $44 billion the next day it was $47 billion. 

Cardano ADA Token Snapshot (at the time of writing):

Market Capitalization$89 billion
Current Price$2.77
24 HR Volume $4.8 BIllion
All Time High/Low$2.97/$0.017
Script in Circulation 32.14 bn ADA 
Total Supply 35.05 bn ADA 
Ethereum CARDANO 
Ethereum originally had 15 transactions per second (tps). After upgrading to Eth2.0, it will be able to process 100,00  transactions per second. When the Cardano network was first tested it could process 257 tps in 2017. It will be able to process about 1 million transactions per second. 
As a PoW network, Ethereum relies on miners to validate blocks of transactions and add them to the blockchain. Ethereum miners receive a reward of 2 ETH for participating in the confirmation of transaction blocks. These rewards are set at half that of Bitcoin. In addition, the difficulty of mining on the network increases with network congestion.Like PoS, Cardano does not rely on miners to secure the network, the PoS network allows regular users to confirm the state of the blockchain by placing their tokens in the network wallet. Thus, the PoS network provides a more democratic system for decentralized networks. In fact, the typical reward for every block generated is almost 750 ADA per block (at epoch 242).
The Ethereum company raised $ 18 million from thousands of international contributors, and Ethereum raised $ 150 million in an ICO at the time of its DAO (Decentralized Autonomous Organization). During that time, it was the largest ICO to date. By comparison: The Cardano ICO raised $ 62 million in 2017, in the midst of the first cryptocurrency craze. The network immediately gained attention thanks to being developed by Ethereum co-founders and academic experts.
The highest return that eth ever received from its inception was 11345% The highest return ADO from its inception  made was 615703% 

Investment Analysis:

ADAJan 2021Feb 2021March 2021Apr 2021May 2021Jun 2021Jul 2021Aug 2021
Price (US $)0.310.881.171.261.651.481.282.09
MoM ROI (%)98.03%181.27%32.62%7.72%31.35%-10.55%-13.41%63.37%
Volume3.388.675.404.217.283.073.995.07
% growth189.31%156.72%-37.66%-22.12%73.07%-57.81%29.83%27.00%
Market Cap9.7526.9037.3640.2052.8847.2741.0167.21
% growth98.04%175.89%38.86%7.60%31.55%-10.61%-13.25%63.89%

In the table above we can see that price has been somewhat stable. Prices held up during the market crash in May, and ADA stood its ground and remained resilient. The slight dip was in June and July, it can be attributed to the regulatory concerns surrounding different aspects of the cryptocurrency market. Big exchanges, such as Binance, have seen increased scrutiny from regulators across the globe.

The market capitalization followed the same trail as that Price and a boost in the month of August due to the Alanzo update announcement it crossed Binance coin (BNB) and secured 3rd rank in terms of market cap. The volume has been volatile on the other hand but in the last 2 months, it has held itself and increased by around 50% since January. The numbers suggest a strong future for the asset if it continues to deliver its promises. 

ADAQ1 2020Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021
Price (US $)0.0450.0580.1170.1270.7751.466
QoQ ROI (%)14.68%28.55%102.85%8.45%510.76%89.24%
Volume0.110.200.471.015.754.86
% growth114.07%77.10%133.15%114.27%470.82%-15.41%
Market Cap1.161.503.123.9524.4446.75
% growth14.68%28.54%108.39%26.68%519.22%91.28%

In the table above we can observe that last year and this year the first 2 quarters were great for Cardano. The prices have been very stable with accelerating growth over the last 6 quarters. The prices have reached dizzying heights by 3158% in these 6 quarters. 

The volume has again been holding strong and increasing over time until the last quarter in 2021 where it has fallen owing to the overall market crash during May. The Market cap has followed the same path as price and has been flourishing well since 2020. The market cap has grown about 3930% in the last year and the first 2 quarters of 2021. 

Conclusion:

Cardano is special because it is based on the philosophy of science and peer-reviewed academic research. This, Hoskinson said, would prevent future incidents such as the split of ETH-ETC. Another unique aspect of Cardano is it uses a multi-level blockchain to track transactions and store information.

The main blockchain handles people who log in to make massive monthly purchases, while Hydra handles fast purchases of 10 or fewer items. Each express counter is a processing group called a Hydra head, each head can handle up to 1000 TPS, so 1000 Hydra heads can handle 1 million TPS. 

Unlike the mythical monster, when you turn off one head, it does not generate the other two, however, each user who connects to the network generates 10 heads, so the more people use the network, the stronger and powerful it is. They believe their exploratory approach means their smart contracts will be more secure than their competitors.

The peculiarity of this programming language is that non-developers can understand it, which means that stakeholders can clearly understand what they agree with. Cardano’s approach differs from the approach of many cryptocurrencies on the market by prioritizing rigorous research, peer review, and stress testing of everything before implementation, which means the final product has the potential to be more powerful and run more smoothly. before this year to introduce smart contract functionality. 

References:

https://coinmarketcap.com/

Disclaimer : This report is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. The Company has prepared this report based on information available to it, including information derived from public sources that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. This report is preliminary and subject to change; the Company undertakes no obligation to update or revise the reports to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Trading & Investments in cryptocurrencies viz. Bitcoin, Bitcoin Cash, Ethereum etc.are very speculative and are subject to market risks. The analysis by Author is for informational purposes only and should not be treated as investment advice

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