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Cardano has made significant headway in the DeFi space, especially in terms of Total Value Locked (TVL), despite the somewhat weak performance of ADA itself.
TVL refers to the total value of assets locked in various decentralized finance protocols and applications on the Cardano blockchain. Increasing TVL could have several positive effects on the Cardano ecosystem.
The significance of TVL is that it reflects the overall participation and adoption of DeFi projects based on Cardano. A higher TVL indicates more trust and confidence in these decentralized financial services.
This demonstrates that users are willing to lock their assets into the ecosystem using various DeFi protocols for lending, borrowing, staking, and other financial transactions.
Cardano TVL rises amid falling prices
The price of ADA has come down recently, with the latest data from Coingecko showing it currently at $0.305. Over the past 24 hours, the price has decreased slightly by 0.4%, and over the past seven days it has decreased by only 0.3%. Despite these losses, there is a notable upside to the network in the form of TVL Cardano.
The rise of TVL Cardano by 28% over the past three months indicates a growing interest in the DeFi activities offered by the network. This reflects growing confidence among users looking to lock up their assets in decentralized applications such as lending platforms, decentralized exchanges, and liquidity pools.
This increased participation could help develop a vibrant and robust DeFi ecosystem on Cardano, offering users a wide range of financial services.
The total value of Cardano is locked. Source: Defillama
Moreover, TVL Cardano’s threefold YTD (YTD) growth is encouraging for the project’s potential recovery and potential return to its previous all-time highs reached in 2022.
As the DeFi ecosystem on Cardano expands, it could attract more developers, projects, and investors, further enhancing the utility of the network and its value proposition.
The market capitalization of Cardano (ADA) is currently $10 billion. Chart: TradingView.com
Cardano DeFi Lock Outperforms Ethereum, But Market Cap Lagging
Meanwhile, a recent report sheds light on a notable drop in the total number of tokens locked in Ethereum, Cardano’s main competitor. On the other hand, Cardano has become a strong contender, surpassing Ethereum in terms of locking individual tokens in its DeFi ecosystem.
While Cardano outperforms Ethereum in terms of token locking, it still needs to catch up in other critical areas. One of the most significant differences lies in the market capitalization of the two cryptocurrencies. Ethereum’s market cap remains significantly higher than Cardano’s, highlighting Ethereum’s long-standing dominance in the blockchain space.
(The content of this site should not be considered investment advice. Investing involves risk. When you invest, your capital is at risk).
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