The total value locked (TVL) of the Cardano network started at about $49 million in 2023 and has since grown to over USD 107 million. Although the rise can be partly attributed to Cardano’s recent price hike, there has also been a sharp increase in activity across multiple ADA-native DeFi protocols.
The price of the ADA cryptocurrency has gone from about $0.25 at the beginning of the year to about $0.40 at the time of writing. Financial performance measures last month for the layer 1 proof-of-stake blockchain network were generally positive.
Furthermore, the creation of the Djed stablecoin has caused an increase in demand for ADA coins, which are one of the main reserve tokens for the new algorithmic stablecoin.
CARDANO (ADA) TVL REACHED NEW HIGHS
The number of ADA locked in Cardano DeFi applications went from 200 million to about 270 million in a week since the introduction of the stablecoin in January. As of press time, the Djed protocol has raised over 30 million ADA to issue around 12 million DJED stablecoins, with a reserve ratio of 601%.
Meanwhile, it has led to increased use of Cardano itself, with the total value locked (TVL) of the layer one network increasing by more than 100% since the beginning of January.
Djed’s beneficial influence on Cardano adoption may have only just begun. Since Terra’s demise in May, the cryptocurrency industry has been looking for a reliable stablecoin, and it seems that Djed fills that need.
For example, Djed will have an overcollateralization ratio between 400% and 800% and will be backed by a reserve of various cryptocurrencies. A structure like this is intended to protect Djed from sharp drops in the value of the currencies that back it, avoiding the problems that plagued the Terra Luna ecosystem.
However, the 24-hour trading volume of Cardano (ADA) coin increased by 26.48% to around $393,766,006. ADA is the eighth largest cryptocurrency by market capitalization, with a market value of $13 billion.
ADA is likely to continue to grow, and will most likely catch up with the dollar by mid-year, as analysts predict. However, the Cardano network is expanding as more users and developers join it. Also, there is an increased demand for ADA as the big sharks and whales continue to accumulate it.