The cryptocurrencies market has fallen off the cliff in the past few months. However, Cardano (CCC:ADA-USD) has been an anomaly, posting some healthy gains over the past few weeks. It’s looking like 2022 will be a fascinating year for ADA-USD, which could pose a real threat to Ethereum (CCC:ETH-USD).
The crypto industry has been chopped up in the past few months. The global crypto market capitalization is roughly 50% lower than its November highs of $3 trillion. Moreover, the skepticism surrounding the industry is growing. Yet, Cardano continues to expand its use-cases, making it one of the most attractive cryptos for the long haul.
However, I believe that such roadblocks are unlikely to slow down the proliferation of digital assets. The market is evolving fast, and whole ecosystems are developing around it. Hence, crypto such as Cardano, which offer immense real-world utility, will thrive over the long run. Having said that, let’s look at why ADA-USD could emerge as a huge winner in the market this year.
DeFi is the Key to Cardano
Cardano recently launched its smart contract functionality, which will be a turning point for it to become a major player in decentralized applications. The utility of dApps continues to grow in various industries, which bodes incredibly well for Cardano. The crypto platform has over 900 scripts for dApps at this time, and with smart contract functionality in place, it can deploy these apps on a much grander scale.
Perhaps the biggest challenge would be to take a chunk out of Ethereum’s market share in DeFi. Ethereum has over 2,500 dApps running on its network. We have seen Ethereum cede a lot of its market share to some of its peers in the past year. It had 95% value locked in the DeFi sector roughly a year ago. However, that number stands at around 60% at this time.
Moreover, Cardano adds new features to its platform to chomp away Ethereum’s market share. It recently launched a decentralized exchange called the SundaeSwap. The exchange was launched in beta mode on Jan. 20, and an initial stake offering was also opened on that date. Similar to other exchanges, the SundaeSwap will offer a native token to carry out various transactions called Sundae. The addition of the exchange is perhaps the toughest test for Cardano’s smart contract functionality.
Incredible Outlook Ahead
Cardano’s developers are aiming to make the network fully decentralized this year. In achieving this, it will be rolling out a peer-to-peer test net and running the network through P2P staking. Cardano’s founder Charles Hoskinson talked about how his goal for the year was to put “all the pieces together to get an end-to-end microfinance transaction on Cardano.”
Furthermore, the network is expected to become even faster this year. Cardano will be launching its Hydra layer-2 system, enabling it to handle a whopping 1 million transactions per second. The system makes use of off-chain heads to process transactions at insane speeds. Hydra is expected to launch this year, push ADA-USD higher, and solidify its long-term case. Additionally, the metaverse initiative called Pavia, which the network has been working on. Within a few days, more than 60% of its offering of 100,000 land plots was sold.
What makes Cardano an exciting long-term play is its well-thought-out roadmap. Its developers have laid down clear goals for decentralization and are now working on the last two stages.
Final Word On ADA-USD
Cardano is one of the cryptocurrencies to look out for this year. It has multiple updates, potentially making it a strong competitor to Ethereum’s dominance in the DeFi realm. Moreover, its throughput is also expected to increase substantially with the Hydra update. Hence, ADA-USD is arguably one of the best crypto’s to bet on this year.
On the date of publication, Muslim Farooque held a LONG position in ETHEREUM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.