Cardano's Q1 2023 Report: Surge In Market Cap & TVL Signals Network's Rise In Crypto Ranks

Cardano, one of the largest cryptocurrency networks, saw a significant increase in market capitalization and total value locked (TVL) in Q1 2023, according to a recent Messari report. 

Cardano’s Q1 Growth Performance & Financial Overview

The market cap of Cardano’s native token ADA rose 54% quarter-over-quarter (QoQ) from $8.6 billion to $13.2 billion, moving the network up from ninth to seventh largest network by market cap. 

As per the report, the TVL of Cardano grew by 172% QoQ from $50.8 million to $138.3 million, driven by established protocols like Minswap and newer protocols like Liqwid Finance.

Stablecoins such as Indigo’s IUSD and Djed’s DJED drove total stablecoin value up 261% QoQ, contributing to the overall TVL increase. In addition, the first Hydra Head, a Layer-2 state channel scaling solution, was opened on the mainnet, offering a solution to scaling issues on the network.

Despite the growth in market capitalization and TVL, new addresses and average daily transactions decreased by 71.5% and 10.6% QoQ, respectively.

The average transaction fee increased from $0.11 to $0.12. Still, it remained lower than the average transaction fee of $0.17 in Q3 2022, indicating that transaction fees are decreasing given the same amount of network traffic.

Cardano’s treasury balance grew to 1.21 billion ADA during Q1, with a 100 million ADA increase in line with growth from previous quarters. 

The value in ADA terms increased 9.1% QoQ, while the value in USD terms increased 66% from $278 million to $460 million. The nominal staking yield on Cardano is generally 3.3% for ADA delegators, although it can vary by stake pool.

Cardano’s first sidechain, Milkomeda C1, launched in early 2022, bringing EVM compatibility to the network. While its TVL and activity metrics declined since Q2 2022, native DEX Blueshift still maintained almost 50% dominance in TVL.

Nevertheless, Cardano’s growth in market cap and TVL in Q1 2023 indicates that the network is gaining traction in the cryptocurrency market. Despite the decrease in new addresses and average daily transactions, the growth in the network’s DeFi ecosystem and the opening of the first Hydra Head on the mainnet offer potential solutions to the scaling issues.

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