Overview 

In 2017, the third-generation, decentralized proof-of-stake blockchain platform known as Cardano was developed with the platform’s cryptocurrency ADA. It is a digital token that, like other cryptocurrencies, is used to pay fees for running Dapps on the blockchain and can also be staked to earn rewards. Any blockchain platform’s algorithm for building blocks and validating transactions is its beating heart. Blocks are mined using the proof-of-stake (PoS) protocol by the Ouroboros algorithm, which is used by Cardano. It is the first blockchain network to be based on a scientific ethos and to have been created using rigorous scientific methods and peer-reviewed research. Cardano, which was created by an international team of top scientists and engineers, is expected to completely change how we use and interact with blockchain technology.

A look back to Cardano in 2022

Cardano (ADA) has been making progress in the area of development activities while the majority of the cryptocurrency market is still battling to regain its value following the effects of the FTX crash, capping off one of the worst years in the history of the industry. While all the projects were struggling in the bear markets of 2022, Cardano’s foundation was busy with several developments and upgrades in their system, which ultimately led to the increase in the TVL surge. 

Key Highlights of 2022 for Cardano 

According to the stats provided by Cardano on their Twitter handle. The on-chain data looked like this till December 12, 2022.

• With its smart contract feature accounting for a growth rate of 394% compared to 2021, Cardano’s major network operations have seen tremendous growth in 2022, reaching the milestone of 4,445 contracts as of December 16 and 4,705 by the end of the year. It is worth noting that Cardano’s number of smart contracts accelerated in these months after the platform officially rolled out the Vasil hard fork upgrade on September 22

• At the same time, the platform’s native tokens minted grew by 192% to reach 7.3 million mark, while Cardano transactions soared by 139% to 56.9 million, representing an increase of 47% over the previous year.
• According to the stats, the number of wallets on the chain also increased by almost 47% to 3.80 Mn with around 2.04 Mn delegated wallets on chain.

Cardano Vasil Hardfork: Upgrade to Increase Smart Contracts and Transactions 

Cardano planned its Vasil hard fork and was working towards its execution for the majority of 2022, with the goal of enhancing transaction speeds and the scalability of the network. The release of new functionality through the Vasil hard fork was on September 22, 2022. Although it is not the first time the blockchain has done a hard fork, which is essentially a network upgrade where new features or earlier issues are handled, the Vasil hard fork promised to open up vast possibilities for Cardano’s community of users and developers. By reducing the amount of time needed to transfer blocks, the Cardano blockchain now offered quicker transactions per second and improved data processing both inside and between chains (TPS). As a result, the number of smart contracts deployed and transactions on the blockchain increased by two folds and has seen upward growth since then. 

Djed Testnet and other improvements 

Djed Public Testnet went live on May 4, 2022. The team also made significant progress with most of the work in configuration management, UI integration and final designs. Many new partnerships and collaborations (e.g. with NMKR, UZH Blockchain Center, and veritree) were announced and Cardano Summit 2022, which was held November 19-21, 2022 in Lausanne, Switzewrland was also seen attracting a huge number of eyeballs. 

Cardano TVL Surge

Now coming on to the year 2023. The TVL of ADA has surged from $64 Mn at the beginning of the year to $142 Mn at the time of writing seeing an increase of whopping 120%!

The reasons for the changes are multiple and one of them includes upgrades in the dApps which are built on Cardano.

• Currently, all five of the leading DeFi projects on Cardano are seeing double-digit growth. The Minswap DEX, which has a 31% market share, is the most successful DEX. The value of Minswap TVL has increased 18% in the last week to $39.5 million. The DEX has been performing significantly well since its launch and was able to steal the first position in just 10 days of its launch. COTI and Minswap started working together to implement the Djed stablecoin on the Minswap DEX which was the early success of the DEX and once it went live, the TVL also increased. TVL of Minswap also increased after an announcement was made in the tweet which stated that a new protocol of farming was being introduced, allowing users to harvest tokens from multiple farms at once. .

• Over the previous week, collateral on the Meld and Indigo lending platforms has increased by more than 40%. Also, the protocol Indigo saw some major improvements including introduction of DEX aggregator, liquid staking protocol and multiple partnerships done by Meld. Furthermore, in just one week, the WingRiders DEX’s total locked value increased by 77% in 1 month after it unveiled Curve-inspired stable swap pools that would support the growth of stablecoins on Cardano.

A few more reasons for the surge in TVL may include 

DJED Stablecoin Launch 

The stablecoin of the network DJED may be the most responsible for Cardano’s rise this month. Over-collateralized and pegged to the US Dollar, Djed is an algorithmic stablecoin. It is  one of the first stablecoins on the market using a strict verification process. At the time of writing, Djed has a reserve ratio of nearly 600%, meaning each Djed is backed by six times its value in ADA. At current prices, the ADA locked for issuing Djed is worth over $10 million. The tremendous growth in TVL was observed when the announcement was made in the month of January 2023 which has seen a growth of 120% at the time of writing. 

More Upgrades Lined-up for Cardano

The most recent update in the Cardano Ecosystem was announced in a tweet mentioning an upgrade in the pre-production environment to protocol v8. The upgrade is said to bring enhanced cryptographic features to Cardano while improving cross-chain decentralized application (dapp) development on Plutus. In the announcement, it was stated that the upgrade would take effect on 11th Feb 2023 and as a result, the TVL showed an upward trend as shown in the data below. 

Future Prospects for Cardano 

A number of further key advancements on the Cardano network might push the TVL of ADA. For instance, the team is putting the finishing touches on the first smart contract ever created in Eopsin, a Pythonic programming language, as well as an update to the Plutus smart contracts that will provide new built-in functionalities. Notably, since enabling the smart contract feature on the network, the metric has surpassed the 4,000 mark. 

The Cardano network is already being used by more users as a consequence of the growing development activities and encouraging technical analyses as a result Cardano added 51,868 wallets in the first month of the year, according to Finbold.

Conclusion 

Cardano’s TVL has seen exponential growth this year even in a bear market which shows that the ecosystem created by the founding teamis sustainable. The projects launched on Cardano have seen impressive growth which has resulted in the growth of the protocol’s TVL. The recent launch of Djed and the announcement of v8 of the protocol assisted in the TVL reaching the $142 Mn mark. With daily upgrades in the protocol, it is expected that the TVL of the protocol will see an upward trajectory which will be supported by the increasing popularity of the stablecoin (Djed) as more utility of ADA will be seen.