On March 2, President Donald Trump mentioned that Cardano’s ADA (ADA) tokens in Cryptocurrencies would be included in the US strategic password reserve. Trump’s March 6 executive order said that Altcoins would be part of DIS (Digital Asset Stockpile) under the Treasury’s “responsible stewardship.”
ADA’s potential inclusiveness in the government’s portfolio has caused the surprise and sometimes harsh criticism of the industry. Although there are many loyal investors who have supported it for many years, many people in the encryption community have questioned why tokens were included in digital asset stocks.
Let’s analyze the blockchain to see if the foundation and utility of the ADA supports the place in US digital asset stocks.
Case of ADA in US digital asset reserve
Cardano, released in 2017 through ICO, is one of the oldest smart contract platforms. It is different from other people through the use of a research -oriented design approach and the use of delegated understanding proof mechanisms combined with the extended UTXO accounting model.
Cardano’s ambition as a smart contract platform was well captured by X ‘Cardano_Whale.
The X POST emphasizes the usefulness of ADA (“most VC coins”) with Cardano’s decentralized governance.
In fact, Cardano’s project catalyst is one of the largest decentralized financing initiatives in encryption. Through this, the financial funds of transaction fees and inflation are democratically assigned to community proposals. In addition, unlike the Ethereum Network, which still depends on the offChain Governance for major upgrades, Cardano aims to completely switch to Onchain governance.
According to Cardano Foundation, Floin Hard Fork, which happened on January 29, marked the transition to “complete distributed governance.” ADA holders “We grant actual voting rights to the future of parameters, withdrawal of the finance, hard fork and blockchain.”
Cardano’s original coin ADA is used for network costs, staying and governance. The maximum supply was 45 billion, with 330 billion won initially distributed, and $ 5 billion in public sales, 26 billion, IOHK, Emurgo and Cardano Foundation.
The remaining 14 billion ADAs have been booked for gradual release through mining. If 0.3%of ADA reserves are distributed as rewards every 5 days, the ADA inflation decreases as the reserves are depleted. At present, the inflation rate is about 4%and the circulation supply is 35.95 billion ADA.
The capped supply can support the value of the coin and justify what is included in the DAS, but other ADA indicators, such as commissions and staying yields, are far behind competitors.
Should Cardano’s delayed activities be raised?
Despite the years in the Smart Contract Ecosystem, Cardano struggled to create enough activities to establish himself among leaders. As a result, limited use of ADA in the encryption ecosystem raises concerns about organ value.
According to Messari’s 2024 Cardano Report, the blockchain has a daily daily speech address, an average of 71,500 transactions. According to Coingecko, a quarterly fee is $ 1.8 million, in contrast to Ether Leeum’s $ 555 million commission for the same period.
Cardano’s annual stay yields, which were adjusted to inflation, were about 0.7%in 4Q, compared to 2.73%of Etherrium.
Cardano Key Metrics Overview, Q4 2024. Source: Messari
relevant: Password fans are obsessed with lifespan and bioching.
Other blockchain activity indicators strengthen concerns about adding ADA to government portfolio.
According to the report of ELECTRIC CAPITAL, 449 developers worked in the blockchain, ranking 12th among the developer’s blockchains.
Stablecoins’ share is only 0.01%of the total market cap of $ 224 billion, depending on defillama.
Cardano’s Defi ecosystem is developed low and is only 0.3%of the $ 169 billion defects. However, if it is not calculated on TVL because it does not require locks, including core staying, the market share of Cardano increases to 12%.
Cardano’s DAPP activity remains lower than other smart contract platforms. In the fourth quarter, an average of 14,300 daily DAPP transactions were recorded, exceeding the top 25 and Solana’s 22 million. When Cardano records 52,700 transactions every day, it decreases 73% in the fourth quarter of 2023. This rapid drop still tends to be a problem of blockchains in the growth stage.
Cardano dapp transactions, Q4 2024. Source: Messari
Is the potential of ADA enough to justify the US government’s investment?
In the strategic password protection area, the case of ADA is much less clearer than Ethereum and Solana. Cardano’s low activity, limited adoption and weak staying incentives raise serious questions about the ADA’s suitability for government administrative asset pools.
On the other hand, the focus of ADA’s supply and Cardano’s decentralization is more unique than a competitor. They can lead to greater adoption and relevance in the long run.
In addition, projects such as ATRIUM LAB’s projects are exploring the basic compatibility of Bitcoin and Cardano through the EUTXO system, which can potentially unlock new frameworks for promoting activities for Defi and Cardano for Bitcoin.
Can this possibility be enough to justify the location of ADA in digital asset stockpiles?
DAVID NAGE, a portfolio manager of venture capital firm ARCA,
“As with the rest of the Crypto, the Cardano ecosystem needs to find and support developers to create products and applications that are enjoyed and dependent on millions of people, and then they need a great storyteller to strengthen the large stories to strengthen the masses. You can start ADA more meaningful.
This article is for general information purposes and should not be considered legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.