According to Messari's State of Cardano Q1 2023 study, the market cap of Cardano's ADA climbed by 54% from quarter to quarter, indicating that 2023 may be a very good year for the network and cryptocurrency.
The study, titled "State of Cardano Q1 2023" was published on April 18 by Messari's Protocol Research Analyst Red Sheehan, and gives a review of Cardano's ($ADA) performance and trends.
Cardano, a Proof-of-Stake (PoS) Layer-1 smart contract network that was introduced in 2017, aims to increase the security, scalability, and sustainability of decentralized systems and applications. And Cardano is different in that the deliberate methodology and phased development roadmap of Cardano put stability and sustainability before speed.
The report's network overview section notes a drop in new addresses (71.5% QoQ) and an increase in the average daily transaction volume (10.6% QoQ). The average transaction charge did however increase by $0.01, from $0.11 to $0.12, however, it is still less than the $0.17 average transaction fee in Q3 2022.
Again, according to the financial overview section, ADA's price rose by 54% in Q1, lifting Cardano from ninth to seventh place in terms of market value.
In Q1, the treasury balance increased by 100 million ADA, keeping pace with gains from prior quarters, to reach 1.21 billion ADA.
As opposed to the USD value, which jumped by 66% from $278 million to $460 million, the value in ADA terms increased by 9.1% QoQ.
According to Messari, the dollar value locked in the network increased by 172% QoQ. The TVL also increased from $50.8 million to more than $138 million as a result of established protocols like MinSwap and more recent protocols like Liqwid Finance.
Minswap, an automated market maker, is still the leading decentralized exchange for Cardano (DEX). Its influence has diminished, though, since DEX TVL as a whole rose by $31.7 million.
According to Messari, dApp transactions soared and new stablecoins were adopted, nearly tripling the TVL.
The total stablecoin value increased 261% QoQ thanks to the acceptance of Indigo's IUSD and Djed's DJED stablecoins. Its acceptance was also very important in accelerating the expansion of TVL as a whole.
In March, the first Hydra Head, a Layer-2 state channel scaling solution, was released on the mainnet with a restricted rollout.
Wanchain, Midnight, Milkomeda C1, IOG's EVM proof-of-concept sidechain, and IOG's EVM sidechain continue to work on improving interoperability and investigating new use cases within the larger Cardano ecosystem.
Compared to the previous quarter, however, the rise wasn't consistent in several areas. The number of new addresses and the average number of transactions per day dropped by 71.5% and 10.6%, respectively.
Messari emphasized that the typical transaction cost increased by $0.01, from $0.11 to $0.12. The consistent user activity may be the reason why, despite the rise, the average transaction price is still less than the $0.17 average reported in Q3 2022.
Meanwhile, the network launches are still going on. The mainnet launch of Project One, now known as Lace, was announced by Input Output Global (IOG) on April 14. The web3 wallet platform integrates digital assets, DApps, DeFi, and RealFi in a Chrome-only browser plugin.
The NFT market, which is still quite big, is still being targeted by Cardano. By NFT secondary sales volume in Q4 2022, Cardano ranked sixth with $40.5 million in sales. Yet, the study states that in Q1, its daily NFT transactions decreased by 27% while its daily unique purchasers decreased by 23%.
In addition, Cardano's treasury balance allegedly grew in the quarter to 1.21 billion ADA.
According to the most recent CoinShares research, Cardano (ADA) investment products have attracted attention of users of other cryptocurrencies.
Cardano has been very bearish over the last few quarters. The cryptocurrency has been on a steep descending wedge since May 2022 and has been trending lower ever since.
After hitting a bottom around $0.23, however, the cryptocurrency has entered a corrective phase and has been trending upward ever since.
Interestingly, Cardano's corrective phase started in the first week of the year. At the time of writing, the cryptocurrency is up by almost 75% on a YTD basis, indicating that 2023 may indeed be its year.
According to CoinMarketCap, the cryptocurrency is bearish over the last day, owing to the severe beating the crypto market is currently taking. However, the cryptocurrency is still bullish from a 7-day perspective and is 4.23% in the green at the time of writing.
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