Cardano’s value proposition explained
a Cardano community-focused Twitter account, ada whale, shares an interesting post on ADA valuation. Updating on a post he made earlier in the year, he came to the conclusion that ADA is slightly below “fair value” relative to the market, while others are more or less undervalued.
ADA Whale drew this conclusion from a chart that plotted subreddit size versus market cap for the top 50 crypto assets. He/she notes that a user would have been able to make positive year-to-date (YTD) returns of 21.6% by shorting an equally weighted basket of the overvalued assets and longing for an equally weighted basket of the undervalued assets. With the exclusion of LUNA, which imploded in May, the YTD returns would have been +17.8%.
The market remains at a different juncture, he says, and the same strategy may not work again in the next six to twelve months.
Cardano’s value proposition explained
In a thread of tweets, the Cardano community reacted to a critic who questioned the value proposition of Cardano. In a series of tweets in response, ADA Whale stated that “staking on Cardano is essentially like interacting with a DeFi app.”
He added that if TVL had incorporated staking with custodial staking like those chains, Cardano could have been ranked as the second largest DeFi platform behind Ethereum.
According to DefiLlama data, Cardano ranks in a distant 29th place on DeFi chains with a TVL (total value locked) of $61.57 million.
In other comparisons, Cardano fared better as it ranked as the second largest staking network after Ethereum with a market cap of $8 billion, while Ethereum had a market cap of $21 billion.
Also, a thread of tweets by crypto researcher Sooraj might suggest that Cardano has 14 times more participation in staking than Ethereum.
