Cardano Looks Strong Technically and in Terms of Utility

  • Cardano (ADA-USD) is making moves with its Davinci’s Locker non-fungible token (NFT) marketplace.
  • Improving transaction throughput speeds give ADA tailwinds as summer approaches.
  • A research partnership should lead to the development of Cardano.
Cardano (ADA) token with blue and orange digital background.

Source: Stanslavs / Shutterstock

Cardano (ADA-USD) has increased in price of late. That is always an encouraging sign in the fickle world of cryptocurrency. There are several reasons to believe it will move higher in the long term as well. Those reasons include an emerging NFT marketplace, increasing transaction throughput speeds and a research partnership that could lead to positive developments for Cardano.

ADA-USD Cardano $0.969

Da Vinci’s Locker 

Cardano now has multiple ways to benefit from non-fungible tokens (NFTs). It is launching Da Vinci’s Locker, a marketplace that will support the trading of NFTs across multiple blockchains. The platform is designed to become a competitor to OpenSea. 

Right now, it is undergoing a private sale, which kicked off on April 5 with an initial coin offering (ICO). The reason this should interest investors is that it could raise prices in the run-up to the ICO. In order to participate in that ICO, investors have to first purchase ADA. 

A single ADA token currently entitles an investor to 1,126 $DVL. If interest spikes before the ICO, which is scheduled in a few weeks, $DVL will appreciate in price. ADA should rise as well if that happens. 

One of the more attractive selling points is that users can sell NFTs on the marketplace without middlemen, thus receiving 100% of the profits. In short, the NFT angle could evolve into something substantial moving forward. 

Transaction Speeds With Cardano

Cardano is focused on increasing its transaction throughput in the wake of increased user activity following the introduction of smart contracts. IOHK, the company behind Cardano, expects that increase in activity to continue. As a result, transaction throughput must be increased. 

Cardano has already increased its block size from 72 kilobytes (KB) to 80 KB this year. That 11% increase might not be enough, and the company has plans to increase throughput further. However, it can’t simply increase its block size indefinitely. If it did so, system security would become compromised. 

IOHK is planning to overcome this in the coming months with diffusion pipelining and asynchronous validation. These are highly technical concepts and details can be found here. The overall thrust of the news is that Cardano is planning to accommodate increased throughput and rising transaction speeds should result in the coming months. 

That’s a positive for Cardano as it attempts to usurp market share from Ethereum (ETH-USD) and others. That is a positive catalyst to be sure. It is no secret that Cardano ultimately seeks to unseat Ethereum.

Transaction per second (TPS) rates are going to continue to be important in that discussion. Ethereum’s TPS over the last year has ranged between 11 and 16. It’s part of the reason its gas fees are so high. 

Cardano currently processes roughly 250 transactions per second. The more that number improves, the better Cardano’s prospects look moving forward. 

Blockchain Center Partnership

The Blockchain Center of the University of Zurich is another positive catalyst for Cardano. That’s because the Cardano Foundation announced it is partnering with the center to develop blockchain education and research initiatives. 

The University of Zurich is a well-respected educational institution. Although the news isn’t a large, immediate catalyst, it opens new possibilities. The partnership seeks to better understand economic factors and incentives within the network — in other words, the factors that make ADA more valuable.  

Cardano has been very volatile over the past year. It nearly reached $3 back in August. Now it has risen to nearly $1 after a prolonged slump that brought it below $0.80.

For investors bullish on Cardano in the long term, now is as good a time as any to establish a position. It remains a solid project and seems to be working toward implementing features that users demand. 

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks.Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.


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