Analyst Calls Cardano A ‘Ghost Chain’ Amid Disappointing Network Metrics
Cardano’s worth motion has been trending downwards alongside the rest of the crypto market, however the on-chain facet of issues reveals the blockchain exercise is failing to maintain tempo with expectations for a top-tier blockchain.
Recent weeks have proven sluggish participation throughout key community indicators, and the stagnation has elevated the long-standing ghost chain narrative. An instance of this criticism got here from a crypto observer on X, who added a extra blunt evaluation of why the community seems to be underperforming, calling it a “ghost chain.”
Harsh Critiques Point To Liquidity And Usage Weakness
A nearer take a look at Cardano’s liquidity profile revealed gaps which are tough to disregard. Its stablecoin provide of simply over $30 million is exceptionally small for a blockchain with a market worth within the tens of billions, making Cardano’s DeFi financial system shallow in comparison with each its friends and even smaller networks.
A crypto observer often known as hantengri on X summarized the situation in a pointed breakdown, stating that Cardano raised $62 million, generates zero income, processes solely about one transaction per second, and hosts an ecosystem that’s described as principally one DEX and one lending protocol that perhaps seven folks use per day.
The account went additional, arguing that the chain operates like a ghost network guarded by a fanatical neighborhood regardless of sitting at a totally diluted valuation of $21 billion.
He additionally highlighted considerations about provide mechanics, noting that though ADA is labeled as having a set provide, roughly 18% continues to be not in circulation, and staking rewards together with treasury emissions proceed to enter the market with none burn mechanism. To him, these components reinforce the concept that nobody is utilizing the chain in a significant method.
A More Practical Way To View The Ghost Chain Debate
The concept of Cardano being a ghost chain is not as straightforward as a easy sure or no. The label comes from doubts about whether or not the community’s progress matches the dimensions of its ambitions and the scale of its market capitalization.
When the dialog is framed purely round seen exercise, reminiscent of the overall worth locked in its DeFi protocols, energetic functions, or stablecoin liquidity, Cardano does fall behind faster-moving rivals like Solana and Avalanche. Those surface-level metrics make the ecosystem seem quieter than what one would anticipate from a top-tier chain.
Interestingly, Cardano founder Charles Hoskinson had addressed this disparity, noting this is because of a scarcity of DeFi engagement from the 1.3 million customers who’re actively collaborating in Cardano staking.
According to information from DeFiLlama, the Cardano community presently has the twenty fifth largest TVL, with solely about $215.51 million in 61 protocols.
At the time of writing, Cardano (ADA) is buying and selling at $0.1581, down by 0.5% previously 24 hours. The cryptocurrency is down by 10% and 18% within the bigger seven-day and 30-day timeframes. Charles Hoskinson recently appealed to the community to keep away from reacting emotionally and to chorus from panic promoting.
