Million TPS with Hydra and interoperability solutions IOG and Wanchain will lead ADA to #1 in the blockchain space

• During the first quarter of 2023, Cardano’s financial balance increased to 1.21 billion ADA addresses, while TVL increased by a staggering 172 percent QoQ.
• There is a big shift from DEXs to DeFi applications on Cardano as usage of DJED’s stablecoin and Indigo’s IUSD increased by 261 percent QoQ.

After the crypto winter of last year, 2023 has started quite well for crypto investors with Bitcoin and several other altcoins registering over 50 percent gains since the beginning of the year. The Cardano blockchain network behind the popular ADA altcoin has recently released the “State of Cardano Q1 2023” report, which provides glimpses into the overall development and performance of the Cardano ecosystem.

Launched back in 2017, the Cardano blockchain is a Proof-of-Stake (PoS) Layer-1 smart contract network that focuses mainly on scalability, security and sustainability for decentralized applications (dApps) and systems. The Cardano blockchain network has the support of The Cardano Foundation, parent group Input Output Global (IOG) and EMURGO.

During the first quarter, Cardano’s native cryptocurrency ADA saw a 54 percent jump in price while making it the seventh largest cryptocurrency today by market capitalization. During the first quarter, Cardano’s financial balance also increased to 1.21 billion ADA addresses, of which 100 million ADAs were consistent with the previous quarter’s growth. The USD value of these addresses has jumped 66 percent from $278 million to $460 million.

Messari’s protocol research analyst Red Sheehan shared this Cardano Q1 2023 report in which he notes that Cardano’s total value locked (TVL), denominated in USD, grew by a staggering 172 percent QoQ, from $50.8 million to more than $138.8 million. This growth in TVL has been mainly due to the introduction of new stablecoins which have been the cornerstone of the decentralized finance (DeFi) market.

Cardano – From DEXs to DeFi

The Cardano blockchain network has hosted a number of decentralized exchanges (DEX) for some time. Automated market maker Minswap has been one of the leading DEXs on the Cardano blockchain. During the first quarter of 2023, however, Minswap recorded a drop in market dominance for the second consecutive quarter. Along with Minswap, other Cardano-based DEXs such as SundaeSwap, WingRiders, and MuesliSwap also faced a decline in dominance.

According to Messari analyst Sheehan, the shift in dominance from DEXs to DeFi applications is due to the following three main reasons:

1. Cardano’s native ADA-backed overcollateralized stablecoin Djed ended Q1 with 9.5% dominance and a total value locked (TVL) of $13.1 billion.
2. On the other hand, the Cardano-based borrowing and lending protocol Liqwid concluded Q1 with 6% dominance and a TVL of $8.4 million.
3. Similarly, Indigo, an issuer of synthetic assets and stablecoins, also ended Q1 with a TVL of $24.1 million and a 17.4 percent dominance.

Note that the use of DJED’s stablecoin and Indigo’s IUSD has contributed to a massive 261 percent QoQ increase in total stablecoin value. Interestingly, this adoption has played an important role in increasing overall TVL growth.

Last month in March, Cardano also implemented the first Hydra Head, a Layer-2 state channel scaling solution, but with a limited scope. On the other hand, IOG’s EVM proof-of-concept sidechain Milkomeda sought to increase interoperability and explore new use cases within the wider Cardano ecosystem.

Earlier today, Cardano also released its annual report, which highlights the achievements of various teams.

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