Investors have shed more than $200 billion in crypto assets since the beginning of May. In that time, Cardano’s ADA has outperformed both bitcoin and ether with a gain of 3.5%.
With a new software upgrade coming later this month, Cardano Founder Charles Hoshkinson doesn’t seem worried about the dreaded “crypto winter.”
“Bull markets are really frustrating because nobody wants to cooperate. You have a lot of poaching, unrealistic wages, and unrealistic expectations,” Hoskinson, who was also a cofounder of Ethereum, told Yahoo Finance, addressing the tough quarter for crypto assets. “Bear markets are actually quite comfortable. Those are the building parts.”
With a market capitalization of $21.6 billion, ADA is the fourth biggest cryptocurrency, excluding stablecoins. Unlike other projects, Cardano hasn’t taken a “move fast and break things” approach, according to Hoskinson.
Instead, it relies on a more academic, peer-reviewed process for adding software updates, which has drawn both critics and supporters, according to Tom Dunleavy, a senior research analyst with Messari who recently published a report on Cardano.
While the approach might not seem well-suited to the 24/7 crypto sector, it can seem like a refreshing change of pace after crypto exchange Coinbase rescinded hundreds of job offers and the algorithmic stablecoin, TerraUSD, faced a bank run and subsequent $40 billion collapse, which could at least partly be attributed to seeking fast-paced growth.
During the interview, Hoskinson pointed out his engineering firm IOHK, which built Cardano, has published over 140 papers about its blockchain.
"So part of the legacy of Cardano has always been evidence-based software development," Hoskinson said. "So you have to have evidence that your software actually works."
After shooting up a whopping 676% through 2021, the value of ADA has plummeted 57% from $1.38 to 59 cents year to date. It represents 1.64% of the total circulating market crypto capitalization, according to Messari.
As Hoskinson pointed out, “it's been a long road” for Cardano. Founded in 2015 and launched two years later, the blockchain is one of the largest smart contract platforms.
“It took four years before Cardano added smart contracts. That delay meant it lost its head start advantage to other protocols in attracting developers and users,” Dunleavy told Yahoo Finance.
According to Dunleavy and data from Electric Capital’s 2021 crypto developer report, Cardano’s “stagnant growth in developers” is closely related to the difficulty of its programming language.
Aside from its approach to development, Cardano has differentiated itself from other blockchain projects for its focus in African countries. Through initiatives in Ethiopia (despite its central bank urging its residents to stop), Tanzania, and Kenya, the blockchain is being used for real world applications such as academic credentialing and micro-finance.
“So the idea is economic identity and agency for those who don't have it,” Hoskinson said.
“There's about 3 billion people who don't have reliable access to banks. They pay high prices for remittances, for credit, for insurance, and other financial services if they can even get them.”
Cardano’s most recent software upgrade, the Vasil hardfork, is expected to be released by the end of June. The upgrade is anticipated to improve the network’s speed of processing transactions. Hoskinson said the improvement should “allow strong growth in [decentralized applications] volumes” such as those used by DeFi investors.
“So we’re quite boring,” Hoskinson said. “It’s just business as usual — just better, faster, cheaper and bring more people into the tent.”
David Hollerith covers cryptocurrency for Yahoo Finance. Follow him @dshollers.
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