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- During Q1 2023, Cardano’s Treasury balance surged to 1.21 billion ADA addresses, while TVL jumped by a staggering 172 percent QoQ.
- There’s a major shift from DEXs to DeFi applications on Cardano as the adoption of DJED’s stablecoin and Indigo’s IUSD surged 261 percent QoQ.
After the crypto winter last year, 2023 has started on a pretty good note 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, providing glimpses into the overall developments 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 majorly on scalability, security, and sustainability of decentralized applications (dApps) and systems. The Cardano blockchain network has support from The Cardano Foundation, the parent group Input Output Global (IOG), and EMURGO.
During the first quarter, Cardano’s native cryptocurrency ADA saw a 54 percent jump in its price while making it the seventh-largest cryptocurrency today by market cap. During the first quarter, Cardano’s Treasury balance also surged to 1.21 billion ADA addresses, of which, 100 million ADA was consistent with the previous quarter’s growth. The USD value of these addresses has jumped by 66 percent from $278 million to $460 million.
Messari’s Protocol Research Analyst Red Sheehan shared this Cardano Q1 2023 report wherein he notes that Cardano’s total value locked (TVL), denominated in USD terms, grew by a staggering 172 percent QoQ, from $50.8 million to more than $138.8 million. This growth in TVL has been majorly due to the adoption of new stablecoins that have been the cornerstone of the decentralized finance (DeFi) market.
Cardano – From DEX’s to DeFi
The Cardano blockchain network has been host to a number of decentralized exchanges (DEXs) for quite some while. Automated marketmaker Minswap has been one of the leading DEXs on the Cardano blockchain. However, during Q1 2023, Minswap registered a drop in its market dominance for the second consecutive quarter. Along with Minswap, other Cardano-based DEXs such as SundaeSwap, WingRiders, and MuesliSwap also faced a drop in dominance.
As per Messari analyst Sheehan, the shift in dominance from DEXs to DeFi applications is due to the following three major reasons:
- Cardano’s native ADA-backed overcollateralized stablecoin Djed ended Q1 with 9.5% dominance and a total value locked (TVL) of $13.1 billion.
- On the other hand, the Cardano-based borrowing and lending protocol Liqwid concluded Q1 with 6% dominance and a TVL of $8.4 million.
- 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 adoption of DJED’s stablecoin and Indigo’s IUSD have contributed to a massive 261 percent QoQ increase in the total stablecoin value. Interestingly, this adoption has played a major role in boosting the 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 made efforts to boost interoperability and explore new use cases within the broader Cardano ecosystem.
Earlier today, Cardano also released the annual report, highlighting the achievements of different teams.
