A quick look at the Cardano ecosystem’s new developments

Cardano was a late bloomer. While all of the other smart contract-enabled Layer one blockchains have years of serving dApps left and right, Cardano took a more academic approach. They researched, tested, and peer-reviewed. “Built with the rigor of high-assurance formal development methods, Cardano aims to achieve the scalability, interoperability, and sustainability needed for real-world applications,” claims its website.

In September 2021, they finally deployed the Alonzo upgrade, which granted smart contract capabilities to the blockchain. Surprisingly, the price of its native currency ADA didn’t respond well to the upgrade. It fell from around $2.40 at the time of the release to $0.60 at the time of writing. Of course, the market in general hasn’t helped. Not only are all cryptocurrencies in bearish cycles, but we’re seeing red candlestick patterns everywhere in the stock market.

Since prices are declining across the board, let’s examine a few other indicators to do a health check.

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Are the Cardano ecosystem’s developers creating and deploying interesting dApps?

Before we begin exploring a selection of Cardano projects, it’s worth noting that the network relies upon the Cardano Foundation, an organization created “to ensure the positive advancement of the Cardano protocol, while also contributing to the positive advancement of blockchain as a world-changing technology.” So, specialists are curating the space.

Also, the “Voltaire era” approaches. Once deployed, ADA holders will be able to vote on protocol and development proposals. Voltaire also promises a treasury system and funds that the community can channel towards interesting projects. So, the curated space has the capital to grow and it’s practically guaranteed to receive more as long as Cardano keeps producing blocks.

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Cardano, a multi-asset ledger

This blockchain is already a two-layer system. ADA lives in the settlement layer, where transactions are recorded. A separate computational layer houses both smart contracts and dApps. This separation is akin to bitcoin’s layered approach and puts Cardano in a different class than other Layer one blockchains. 

Another characteristic of Cardano is that it will soon be a multi-asset ledger. All tokens created on this blockchain will be native to it. That means, they require little custom code.  In turn, there’s little code to potentially exploit. In addition, Cardano tokens don’t pay execution fees, which makes them more affordable to use. 

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Governance through Project Catalyst

Before we get into the new developments, the Cardano ecosystem has even another way to channel funds to interesting projects. The Project Catalyst is a “series of experiments which seeks to generate the highest levels of community innovation. Catalyst is bringing on-chain governance to the Cardano blockchain by allowing the community to self-determine priorities for growth.”

Governance is a big topic for the Cardano ecosystem. The company behind the whole operation, Charles Hoskinson’s IOHK, said in an article about Project Catalyst: “Governance is a key issue, not just in the context of blockchain, but in the world. There is a fantastic opportunity to learn what has worked well and not so well and offer a decentralized decision-making process that sidesteps many of the pitfalls of traditional centralized governmental systems.”

In the same article, IOHK explains that “every three months, Project Catalyst produces a fresh pipeline of technical, business, creative, and community-focused projects - funded to deliver their proposed ideas that have been voted for by the Cardano/Catalyst community.” How does the process work?

“With each funding round, the community presents challenges across a range of Cardano-related projects. These challenges are then answered by the community who presents plans defining clear solutions. The community votes on the proposals and selects projects to receive funding.”

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SundaeSwap’s rocky beginnings

A lot of people wanted to build Cardano’s Uniswap; the ecosystem’s service of choice for trading, staking, and lending. In the case of SundaeSwap, the DEX is also known for its low cost and high-speed transactions. It’s an Automated Market Maker or AMM, which means that the protocol provides liquidity in an Automated way.

In a separate SundaeSwap blogpost, we covered the protocol’s faulty launch: 

“In its first week, SundaeSwap amassed “$71.69 million TVL (total value locked)” and “more than 300 active trading pools on the exchange.” Then, the team acknowledged that many of the trades and operations had not gone through and proceeded to throw Cardano under the bus. 

Cleverly, they pass the responsibility to the blockchain. “Every successfully submitted transaction on the SundaeSwap DEX reached the Cardano mempool, where all valid transactions await confirmation by the blockchain.”

They eventually went through. And, after that initial delay, SundaeSwap has been consistently working. According to its website, the service is “an ownerless marketplace for efficient cryptocurrency transactions.”

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What is MuesliSwap, exactly?

There’s a fundamental difference between MuesliSwap, the first decentralized exchange in Cardano, and other decentralized exchanges. Namely, the service uses an order book like centralized exchanges usually do and is not an AMM. For every transaction, users are charged a fee plus a deposit for the use of decentralized matchmakers.

The DEX’s governance token is called MILK. Holders have voting rights all across the protocol, staking rewards, and early access to innovation. As with PancakeSwap’s CAKE token, MILK is also a utility token. It’s accepted for different uses across the MuesliSwap network.

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A DEX called ADAX

Nowadays, every Layer one blockchain seems to need its signature decentralized exchange. In ADAX’s case, it’s non-custodial and seeks to provide automated liquidity for trading in Cardano. The platform’s selling point is that all of the fees paid by the users go to the platform’s liquidity pools. About the project’s characteristics, ADAX’s official site says:

“ADAX has no order book -- we eliminate all intermediaries, complexity, and cumbersome procedures from the equation, offering users untrammeled freedom to trade without censorship or loss of control over their assets.”

The fees for ADAX transactions are significantly less than similar transactions in the Ethereum network.

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What about Minswap?

Technically, Minswap is an AMM, multi-pool, decentralized exchange. In practice, the DEX offers a cheap way to swap one Cardano-based token for another. According to their FAQ, Minswap’s aim is “integrating the best asset pool models from across the DEX ecosystem into one protocol. The combination of stable pools, multi-asset pools, and concentrated liquidity will benefit both traders and liquidity providers.”

MIN is the protocol’s utility token. According to the website, “Minswap is a multi-pool decentralized exchange on Cardano.” The project prides itself on having “no private investment or VC allocation” and only having a “21.5% allocation to core team and development funds.” Minswap recently signed a “Memorandum of Understanding” with Genius Yield, another DeFi platform, to keep the Cardano ecosystem strong and united.

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It’s time to talk NFTs

The most interesting NFT platform in the Cardano ecosystem is ADANFT. Their novel approach to access and exclusivity might prove controversial. The platform’s token is ASW. Users will be Silver, Gold, and Platinum tiers based on their ASW holdings. ADANFT is not for everyone: its collections are curated by experts, and some of the NFT pieces will only be available to people in the Gold and Platinum tiers.  

Is this a breakthrough or a terrible idea? The market will decide. According to the project’s website, “ADANFT is an ultra-exclusive marketplace for Cardano non-fungible tokens. ADANFT has been brought by the AdaSwap team in an effort to curate better NFT content by its voting and tier system.”

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Are there Cardano metaverses?

Yes, there are Cardano-based metaverse projects. One of them is Cardalonia, self-described as “the first strategy game to be developed on the Cardano blockchain. Players can choose their clans, exploit various resources and develop the best strategies to grow.” Built on Unreal Engine, Cardalonia uses NFTs to track ownership across this particular metaverse. It also uses the LONIA token to reward users, and players use it to buy and sell assets and land.

Another is Pavia, a Cardano-based metaverse project that’s a play-to-earn game. Its native token is PAVIA, and players can earn it and spend it all across the virtual world. According to Pavia’s website, “There are now over 17,000 land owners in Pavia.io Each land parcel is a uniquely numbered Cardano NFT (CNFT) based on coordinates within Pavia.io.” In total, there are 100K virtual land parcels and they were all sold last year.

One cool thing is that your Pavia avatar is “compatible outside of Pavia.io in over 1,000 apps and games.”

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Conclusion: Cardano is alive

There was much speculation about Cardano’s lack of activity post smart contracts activation. Rome wasn’t built in a day, though. It’s been nine months since the Alonso upgrade and the Cardano ecosystem is finally showing what it’s got. There are no guarantees that any of these projects will be successful or attract the kind of attention needed to succeed, but they are building momentum while doing things their own way.

The Cardano DeFi ecosystem checks all the boxes and it’s finally getting used and tested to see if it’s robust enough. We’ll have to wait and see the results, but rest assured that the market itself will speak clearly through ADA’s price.