Cardano, the blockchain network that is challenging Ethereum’s dominance as a platform for decentralized applications, continues to face price declines despite its long-awaited launch that will have smart contracts, slated for this Sunday (12).
Cardano’s native token, the ADA, has dropped 5% in the last 24 hours and more than 16% in the last 7 days. In comparison, Solana appreciated 30% in the same period.
Cardano managed to maintain its position as the third most valuable cryptocurrency by market capitalization, well ahead of Tether (USDT), Binance Coin (BNB) and Solana (SOL).
Today, at 6:45 pm, Cardano will have an update and will start to support the long-awaited smart contracts. But due to development issues, several decentralized applications (dApps) have delayed their release, and Cardano can see only a few test applications developed by Cardano’s creator himself.
The update could be a big game changer for the network and the entire cryptocurrency market. The expectation around this has been attributed to several factors that have the potential to drive the cryptocurrency industry in a new direction.
With hardfork, it is expected that all kinds of decentralized applications (DApps) that use smart contracts can be built in Cardano. This means that Cardano’s use cases will be expanded to support Decentralized Finance (DeFi) and Decentralized Brokerages (DEX), to add NFTs that can already be coined and traded on the platform.
Reviews and price drop
The Alonzo update sent Cardano’s price skyrocketing earlier this month; the coin hit an all-time record of $3.10 when Cardano developer IOHK launched Alonzo’s testnet on September 2nd.
But then the price dropped to $2.60 amid criticism that the update had difficulties processing concurrent transactions.
As shown in Decrypt, Cardano’s first dApp, a decentralized brokerage called Minswap, closed shortly after it was launched because it couldn’t process multiple transactions at the same time – “exactly what you need on a DeFi platform”, according to Ethereum investor Anthony Sassano.
Several other decentralized brokers have said they will postpone their launch until definitive solutions to the transaction bottleneck are found.
Seriously 6 years of peer-reviewed research and a $90bil+ market cap later and the first dapp on Cardano can’t even do concurrent transaction processing (aka the very thing you need for DeFi). https://t.co/ mcmTjQEKbb
— Anthony Wassano 🦇🔊 (@sassal0x) September 4, 2021
On Sept. 7, the ADA price plummeted nearly 30%, to its lowest level since Aug. 19, during a major market selloff.
Cardano was subjected to a flurry of attacks on social media after the failed launch of Minswap.
Users complained that they were unable to perform basic operations on the platform due to bugs related to the blockchain’s eUTxO transaction model.
Many came to the conclusion that the network was only able to handle one transaction per block, which later turned out to be false.
Now Cardano developers are working on various scaling solutions on the network.
Founder answers criticism
The company behind Cardano, IOHK, tweeted that the criticisms are speculation and that it would face all the FUDs and misinformation, the company also said that the way Cardano handles transactions offers “greater security” and “fee predictability”.
Cardano fans are expecting a price hike this Sunday, and Cardano founder, who is also a co-founder of Ethereum, Charles Hoskinson, has promised the Alonzo update will kick off “a new era at Cardano”.
Tomorrow is the big day! We are entering a new Era of Cardano.
— Charles Hoskinson (@IOHK_Charles) September 12, 2021
Hoskinson also criticized the cryptocurrency industry for being “viciously polarizing” and “inhuman” by instantly labeling those who make mistakes as “criminals” or “liars”.
He expressed his frustration with some members of the Bitcoin community who are still convinced Cardano is a scam, or a scam.
Hoskinson says smart contracts can be “tremendously beneficial” for the Bitcoin ecosystem and for other projects as well.