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Will Cardano’s big update on Valentine’s Day set a new ADA price record?

Tanja Nechet

News editor

Jan 23, 2023 at 09:22

Although called the “Ethereum killers,” Cardano and Solana are always going toe-to-toe. They are constantly being compared. As of January 23, Solana is in 10th place in CoinMarketCap’s ranking, while Cardano is in 8th. Both networks have their pros and cons. 

However, Cardano is considered undervalued. 

The Cardano network has planned a big update for Valentine’s Day. Will the native token’s (ADA) value rise after that to break its previous record of $3 and beat its main competitor?

What’s new for Cardano?

Also on February 14 at 21:44:51 UTC, the main network update is scheduled. Most projects will not be affected. The update will simplify cross-network initiatives by integrating widespread digital signature norms into the smart contract platform of the Cardano blockchain, Plutus.

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The update will allow Plutus to support Schnorr and ECDSA (Elliptic Curve Digital Signature Algorithm) signatures. Two of the most popular signature schemes, Schnorr and ECDSA, are used on many blockchains. For example, Ethereum and Bitcoin.

Both digital signature schemes are smaller, faster to process, and extremely difficult to forge.

It will help developers gain access to a wider variety of multi- and threshold signature designs.

Plutus is such a programming language. The introduction of Schnorr and ECDSA support will allow developers to access new threshold or multisignature projects on Cardano, and improve security.

Current Cardano (ADA) price 

As of January 23, the token price is about $0.37. That’s an 87% drop from the record price of $3.10 recorded on September 2, 2021.

The current market capitalization is $12,981,987,465. At the same time, there are 34,572,231,146 ADA in circulation, and the maximum supply is 45,000,000,000,  with a total supply of 35,394,996,830 coins.

Why is Cardano undervalued?

After two years of development, the Cardano blockchain mainnet went live in September 2017, enabling users to buy and sell ADA coins.

According to the MVRV Z-Score, which identifies overvalued and undervalued assets based on short- & long-term returns, top caps are in the following categories: 

  • Overvalued: BNB;
  • Undervalued: BTC, ETH, XRP, ADA, DOGE, MATIC, SHIB, UNI, LINK.

According to a report from analytics platform Santiment, two indicators regarding the network are bullish. The first is the divergence between price and whale activity, and the second is a sign of seller exhaustion. On every big price decrease, there are fewer and fewer coins moving at a loss. 

“We are near the area of filling the volume gap. We may expect some serious buying at those levels,” Santiment’s expert stated.

He believes that, based on the above, the price will rise.

Is it worth buying Cardano (ADA)?

On the one hand, Cardano has a low TVL. It’s a metric that many investors use; it’s the locked-in total value. In simple terms, TVL measures the amount of activity going on in the blockchain, and in particular, how much of a particular cryptocurrency is blocked in decentralized finance (DeFi) protocols.

The higher this number, the better for the blockchain. For this reason, blockchains with high TVL attract more investors. And according to DefiLlama, Cardano is only 27th in TVL. Meanwhile, its main competitor, Solana, is in 12th place.

In addition, the Cardano network suffers from intermittent failures. The last one occurred on January 22. Half of all nodes failed. At the time, there were delays in transactions.  One of the first people to report the anomaly was Tom Stokes, co-founder, and COO of Node Shark and operator of the ADA steak pool.

The delay was short. Most nodes recovered automatically without human intervention and performed a restart depending on the betting pool selection. Cardano’s developer, Input Output Global (IOG), has promised to further investigate the cause of the anomaly and implement additional monitoring and logging measures in addition to “normal” monitoring procedures.

Cardano founder Charles Hoskinson cited fast automatic recovery as a big advantage of his blockchain.

On the other hand, Cardano boasts that the network continues to grow. More than 1,000 projects have already been built on Cardano: from wallets to DEXs (decentralized exchanges), DeFi (decentralized finance), and more.

In addition, in late 2022, project co-founder Charles Hoskinson announced that the Cardano ecosystem will receive a new privacy protocol called Midnight. A new Dust token for Midnight will also be launched, allowing the project to develop independently of the main network. The main goal of Midnight sidechain is to protect the personal data of users, companies, and developers without infringing on their freedom.  A smart blockchain will allow users to share data without revealing more than they want.

Cardano looks very promising for DeFi. If the upcoming updates show promise, the price of ADA could rise as early as this year.

That said, you have to pay attention to TVL as well. If it stands still or falls, you should think twice before buying tokens. If TVL grows, there are chances for the coins to go up in price, so they are worth being considered for purchase. In any case, investors should always do their own research before making financial decisions.

What is Cardano (ADA)?

Cardano is a proof-of-stake blockchain network that evolves into a decentralized application development platform (DApp) with a multi-asset registry and verifiable smart contracts. Cardano is designed for large-scale, mission-critical DApps.

Cardano is a public blockchain platform launched in 2017. It is open-source and decentralized.

ADA is a platform’s digital currency. Each owner of these coins also owns a stake in the Cardano network. ADA stored in a wallet can be delegated to a stake pool to earn rewards – to participate in the successful running of the network – or pledged to a stake pool to increase the pool’s likelihood of receiving rewards. 

You can buy ADA on most crypto exchanges.

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