After a long sleep… – Is DeFi on Cardano waking up? The eighth cryptocurrency in terms of capitalization Coinmarket cap we could still talk about it. Symbol of a renewal on a DeFi (decentralized finance) which, it must be said, saw its capital flee during the year 2022. Bearmarket obliges. Investigation into the beginning of a return of confidence.
Cardano, a phoenix ready to rise from its ashes?
After a general disinterest and a slow descent into hell throughout the year 2022, would DeFi restart? In any case, this is what the beginning of the year 2023 seems to indicate to us, particularly as regards the Cardano ecosystem (ADA).. The network developed on the initiative of Charles Hoskinsonone of the co-founders of blockchain Ethereumseems to be back on track.
In fact, since 1um January, the TVL (Total Locked Value) on Cardano jumped from 36%going from 49 to $66.6 million. This TVL represents the amount of money locked up on the smart contracts of the different DeFi protocols. In short, these are cryptocurrencies deposited by users to make regular profits.
However, this comeback must be placed in its context. That of a bear market that has been going on for many months now. In fact, at its peak in March 2022, the Cardano blockchain had more than 300 million dollars. A horizon that is currently still out of reach.
The protocols that bring most of this TVL together are first exchange. Like a great leader, it brings together more than 40% the total amount of blocked principal. This protocol is a DEX (decentralized exchange) such as Uniswap on Ethereum. Then comes later Indigo, a synthetic asset trading platform. That is, assets that typically reproduce the price of crypto such as BTC or ETH, or even shares on the stock exchange.
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DeFi, bottoming out in 2022 to recover in 2023?
This data regarding the DeFi sector is elegantly concatenated from the Defillama platform. A nugget of ingenuity that brings together in one place a lot of useful information on a large number of existing blockchains such as Cardano and many others. DefiLlama also launched with great fanfare in early 2023 DEX aggregator that has literally taken over. An aggregator is a tool that leverages all existing DEXs on a blockchain. It therefore offers you the best conversion price when you want to convert one cryptocurrency into another. From ETH to BTC generally.
In general, it was the entire DeFi sector that took a slap throughout 2022, climbing from almost from 180 to 42 billion dollars from TVL. A dazzling flight of capital catalysed in particular by earth-moon cataclysm in May 2022. At that time, TVL across all blockchains went from 140 billion to 80 billion within a week or two.
DeFi is very promising in many ways. In particular, it gives everyone the same tools and the same returns, regardless of our starting capital. And this, unlike traditional banking which has an unfortunate tendency to favor billionaires. That said, DeFi is still a giant sandbox under construction. Subject to setbacks, hacks and experimentation. The Cardano blockchain is also planning to release a new full-size experience soon, its USDA stablecoin.
To keep your cryptocurrencies, nothing beats a Ledger wallet. Nano S and Nano X offer security and ease of use. In fact, they are compatible with the vast majority of cryptocurrencies and networks. They are an absolutely essential alternative to all exchanges that offer to hold your assets for you. Remember, “Not your keys, not your coins” (commercial link)!