When a bear market arrives, the blockchains that continue to innovate and develop are the ones that are best positioned for further success when a bull market returns.
Nobody knows when the next bull market will come, but to make sure you are prepared, it is best to build positions in cryptocurrencies that make development a priority.
Cardano (quotation ADA) is a cryptocurrency that used 2022 to show that it will continue to innovate, even in a bear market.
A solid 2022
Over the past year Cardano has achieved a couple of important milestones.
The first came in the fall of 2021, when the blockchain officially became compatible with smart contracts. Smart contracts are the backbone of any DeFi ecosystem. Without them, developers can't build things like decentralized exchanges, platforms staking, NFT exchanges and many other applications. All of these use cases bring more money to blockchains, which helps them become more valuable over time.
With the arrival of smart contracts, Cardano has taken the first and most important step to attract new growth. Since the end of 2021, nearly 3.000 smart contracts have been added to Cardano. Most of this growth occurred in 2022. The number of smart contracts on the network has nearly doubled since the end of March.
This growth has added new value to the blockchain. To measure the increase in value, we can look at a statistic known as Total Value Locked (TVL), which serves a similar purpose to that of the market cap, but is best used to quantify the value of a DeFi ecosystem.
Since the beginning of 2022, Cardano's TVL has experienced explosive growth. In January, Cardano's TVL was just under $ 1 million. It shot up to over $ 325 million in March.
While Cardano's TVL has taken a hit in recent months due to the widespread decline in cryptocurrencies, more interesting news has emerged recently.
To ensure Cardano is ready to deal with increased traffic, it is receiving an update.
Known as Vasil hard fork, this update is expected to speed up transactions and reduce fees. Other updates will streamline the functionality of smart contracts and allow developers to build applications faster.
These updates will allow Cardano to become more flexible without sacrificing speed or increasing fees. In blockchains, this is known as scalability.
Prioritizing scalability is essential for growing a blockchain. And when a blockchain supports more applications and utilities, it becomes more valuable.
To move on
There is no way of knowing when the so-called cryptocurrency winter will end, but the fact that Cardano has continued to develop despite the crisis deserves recognition. As the cryptocurrency winter continues, cryptocurrencies that struggle to attract new users will eventually die out. However, those who continue to innovate will have an advantage when the next bull market returns.
Cardano's DeFi ecosystem is probably just in its infancy. The introduction of smart contracts and the release of Vasil's hard fork have been major findings that are likely to attract more developers and hopefully higher prices in the future.