In Short
- Despite the recent downswing, the Cardano ADA token, Total Value Locked, increased over 114% Since Feb.
- The Minswap exchange leads this figure with $57 million in blocked ADA.
Cardano’s TVL Over 400 Million ADA. The Cardano token price has touched $0.353 (May 11th), breaking the $0.36 support. However, the DeFi system of the said blockchain continues to grow. So what is the reason for such a paradox? Cardano achieved a significant milestone, as its blockchain’s total Value locked (TVL) surpassed ₳420 million. This achievement comes just over a month after TapTools, a Cardano wallet tracker, predicted a substantial increase in the network’s TVL.
It is worth noting that TapTools made this prediction and highlighted several factors that could play a crucial role in Cardano’s explosive growth in the coming months. Precisely the Cardano DeFi ecosystem has reached a TVL of ₳428 million, according to DefiLlama. This figure amounts to approximately $155 million when converted to U.S. dollars.
Indeed, if we take a short-term look, it could look more attractive, but ADA’s performance in 2023 is a 116% increase in Total Value locked in since the beginning of the year. In addition, Cardano’s TVL has seen an increase of almost 8% in the last month, indicating a steady adoption and expansion of its DeFi ecosystem.
Minswap takes the lead
Looking at the blockchain data, it becomes clear that Minswap is the leading protocol on Cardano’s network by a significant margin, with a TVL of $57 million. This decentralized exchange has a market share dominance of 29.84%. Indigo is the second-highest secured debt protocol, with a TVL of $30 million.
Other notable protocols within the Cardano DeFi ecosystem include WingRiders, Djed stablecoin, and Liqwid, which have TVLs of $15.6 million, $13.9 million, and $12.2 million, respectively. It is also worth explaining that the Total Value locked metric estimates the cryptocurrency locked within the DeFi protocols on a specific blockchain.
You can compute TVL by summing up the value of all crypto assets locked in various DeFi protocols, including cryptocurrencies used as collateral, liquidity, or staked in various DeFi applications. This metric is essential for measuring economic activity and how relevant a particular project is.
What is Total Value Locked (TVL)?
Total Value Locked (TVL) in crypto refers to all cryptocurrency assets currently locked in various DeFi protocols. DeFi stands for decentralized finance, which refers to financial applications built on blockchain technology, allowing users to access financial services without middlemen like banks or traditional financial institutions.
TVL is an essential metric for measuring the success and growth of the DeFi ecosystem. It provides an overview of the total assets users utilize within DeFi protocols. The higher the TVL, the more popular and successful the DeFi protocol is among the crypto community.
TVL has become an increasingly important metric in the crypto space, providing insight into the overall health and adoption of DeFi protocols. As DeFi continues to gain traction and mainstream adoption, TVL is likely to become an even more important metric for measuring the success and growth of the DeFi ecosystem.
What to expect from Cardano (ADA)price?
Altcoins may face challenges at this time due to the recent interest rate increase by the Fed. In the coming months, the Fed must stop this draconian policy for the price of altcoins to resume its recovery path from its all-time highs of 2021. Therefore, amid this uncertainty, the projection shared by most analysts is bearish. Dan Gambardello, a well-known cryptocurrency trader and analyst, offered an example of this view and said that ADA had been trapped in a prolonged period of sideways price action, generating frustration among investors.
Gambardello further explained that ADA’s chart formed a significant red rectangle, signifying a consolidation phase that lasted for nine months, with a narrow price range between $0.43 and $0.31. Although the altcoin broke out of this range, it quickly returned. However, he emphasized that prolonged periods of sideways movement are not unusual during bear market transitions.
Analyzing the daily chart of ADA from a technical point of view, the analyst highlighted a recent breakout of a descending wedge pattern. However, the price of the Cardano token struggled to overcome the resistance of the 20-day moving average. Leaving bearish projections aside, some events that may contribute to ADA resuming its upside are a resolution in the Ripple vs. SEC case and a worsening of the U.S. banking crisis.