Cardano (ADA) Market Activity Plummets in Q2 2024 Amid Broader Crypto Downturn

According to a recent report by data intelligence firm Messari, Cardano and its native token, ADA, experienced a notable decline in the second quarter

Messari Report Highlights ADA's Q2 Decline, Despite Gradual Ecosystem Growth

Cardano's (CRYPTO: ADA) native token experienced a downturn in the second quarter of 2024, according to a report by data intelligence firm Messari. However, the platform witnessed gradual growth in certain aspects of its ecosystem.

Here's a summary of the key takeaways from the report:

Price and Market Cap: ADA's price plunged 39.7% to $0.39, while its market capitalization fell by 39.4% quarter-over-quarter (QoQ) to $14 billion. This decline was slightly influenced by a small increase in circulating supply, leading to a minor discrepancy in market cap figures. As a result, ADA's market cap ranking dropped from 9th to 10th place.

Transaction Fees: Transaction fees on the Cardano network, which contribute to covering storage costs and processing transactions, also faced a downturn. Revenue in USD from transaction fees decreased by 44.3% QoQ to $0.74 million, while revenue measured in ADA fell by 28.0% to 1.60 million ADA.

Furthermore, the platform's average daily transactions decreased by 27.5% QoQ to approximately 51,400, and the number of daily active addresses (DAAs) fell by 33.2% to 31,800. However, the ratio of transactions to active addresses increased by 8.4% QoQ to 1.62, suggesting a rise in “power users” engaging more frequently with the platform.

Staking Metrics: In terms of staking metrics, both total ADA staked and the staking rate saw a slight increase. However, the total value of staked ADA in USD decreased significantly by 39.6% to $8.9 billion, primarily due to the falling price of ADA.

Cardano's treasury balance, measured in ADA, rose by 5.8% QoQ to 1.57 billion ADA, although its dollar value decreased by 36.7% to $604.7 million. Currently, 20% of transaction fees are allocated to the treasury.

DApp Activity: DApp activity on Cardano also saw declines, with average daily DApp transactions falling by 35.7% QoQ to 34,300 and average daily decentralized exchange (DEX) volume in USD decreasing by 42.5% to $4.2 million.

Cardano's TVL Drop: Total value locked (TVL) on Cardano dropped by 41.2% QoQ to $219 million, following a peak of $506 million in March 2024, which was driven by a broader crypto market downturn rather than Cardano-specific factors.

For the first time since the introduction of Cardano's stablecoins in late 2022, the stablecoin market cap on the platform decreased by 12.4% QoQ to $19.6 million. Average daily non-fungible token (NFT) sales also faced a downturn, with a sharp decline of 57.4% QoQ to less than 730 transactions.

Despite these challenges, the report also highlighted ongoing developments within Cardano's ecosystem. The emergence of new stablecoins, such as USDM and MyUSD, led to a dramatic rise in their market caps, indicating a shift in the landscape.

Additionally, upcoming upgrades, such as the Chang Hard Fork, aim to enhance Cardano's governance capabilities, moving the network closer to its long-term goal of achieving self-sustainability and enabling greater participation in decision-making processes.

At the time of writing, ADA was trading at $0.34, down by 0.7% over the 24-hour period.

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As a result, prices can fluctuate rapidly and drastically, and may experience sudden and substantial drops at any time. It is therefore crucial to conduct thorough research before making any investment decisions.

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