Activity in Cardano’s ecosystem is slowing as the crypto winter continues and as competition in the industry rises. Data shows that the value of ADA locked in the DeFi ecosystem has risen to a record high of 625 million.
The ecosystem has done well in 2023 since it started the year at over 204 million ADA coins. Recently, however, the volume of tokens entering the ecosystem is growing at a slower pace.
MinSwap, a decentralised exchange in Cardano’s ecosystem, is the biggest dApp with over $39 million in total value locked (TVL). Indigo, a collateralised debt position (CDP) platform, has over £8 million in assets. Other top players in the ecosystem like Liqwid, Optim Finance, and Djed Stablecoin have also made robust growth.
Developer commits is another sign that the industry is slowing. These commits stood at just 22 in the past 24 hours, down from a peak of 50 in March. Also, the total fees that Cardano collects has been decelerating.
Cardano and other layer 1 and 2 blockchains are facing numerous challenges as the crypto winter continues. For example, competition in the industry has risen substantially. Some of the alternatives that have gained share recently are Arbitrum, Optimism, and Base, which is owned by Coinbase.
Other layer-1 networks that are good alternatives to Cardano are Avalanche, Cronos, and Kava,
Monetary policy is the other challenge facing Cardano as interest rates remains at the highest level in decades. Higher rates have made safe assets like cash more attractive. Short-term bonds are yielding over 5% while certificates for deposits (CDs) and money market funds have a 6% yield.
The implication of all this is that many investors are rotating from risky assets like stocks and cryptocurrencies to safe assets. Further, the ongoing legal challenges like the SEC lawsuit on Coinbase and Binance have incentivised people from digital coins.
The post Cardano DeFi TVL stuck at a record high as growth slows appeared first on Invezz.
@CardanoFeed - Follow us on X (formerly Twitter)
Stay informed with the latest $ADA Cardano news in real time.FOLLOW NOW!