Is Cardano a Dead Chain? ADA Analysis Suggests Network May Never Deliver on Potential

• Ongoing innovation within Cardano contrasts sharply with its weak price performance, leaving investors questioning its future.
• Cardano shows strength in core development yet struggles to match that with real adoption and ecosystem growth.
• Despite high staking rates, Cardano’s on-chain activity remains low, revealing a disconnect between engagement and network potential.

Cardano (ADA) is facing a unique conundrum.

It boasts a loyal and passionate community of die-hard supporters who believe in the long-term potential of the platform. Those who are committed to the project’s vision of a decentralized future and the meticulous, research-driven approach Cardano takes toward development.

Still, it seems their trust might not have yet paid off: Adoption has lagged far behind expectations and ADA’s price performance has been underwhelming, trailing other major cryptocurrencies and leading many to question its relevance.

In this CCN Reports edition, we evaluate whether Cardano is nearing obsolescence as a “dead chain” or still holds untapped potential as a viable investment.

By analyzing key data points such as adoption rates, price performance, developer engagement and more, the goal is to offer a clear perspective on whether the blockchain can flourish or if it risks fading into the ether, similar to many other projects that failed to endure and have since been forgotten.

But first, let’s define what it means for a chain to be considered dead—it’s not just about price drops and losing investor interest.

A dead chain is one that has lost its heartbeat. For a blockchain, this heartbeat is represented by activity: Developers building, users transacting and dApps thriving.

A chain is considered “dead” when its core of innovation and engagement has vanished. When developers stop contributing, transaction volumes shrink to a mere trickle and users no longer care to participate—that’s when the chain effectively ceases to exist.

ADA Price Stuck in the Red

Since its last all-time high (ATH), ADA’s price performance has not been particularly strong.

Although there have been eight major price rallies—one in 2017, one in 2018, four in 2021 and two in 2024—the current price is well below those peaks. The red-highlighted price areas indicate moments when investments in ADA would have incurred losses.

As seen in Figure 1 below, these areas capture a substantial portion of the token’s trading history. And the four-year crypto market cycle suggests that 2024, being the halving year, is not yet a strong bull market period, with the real growth expected to begin sometime in 2025. Despite this, ADA’s performance continues to fall short.

To illustrate, if an investor bought at the lowest prices outside the red zones (Figure 1), the potential gains would be as follows:

• 17.5x at the release’s lowest price;
• 2.65x at the March 2018 low;
• 18.37x at the March 2020 low;
• 1.42x in December 2022;
• 1.44x in June 2023;
• 1.23x at the August 2024 low.

These figures suggest that while there have been opportunities for profit, the returns are relatively modest, especially compared to other major cryptocurrencies.

However, the main concern isn’t just the moderate returns or the gains seen by a few early investors. The bigger issue is Cardano’s struggle to recover after the 2022 bear market. While Bitcoin (BTC) fell to $15,000 (Figure 2) in 2022, Ethereum (ETH) to $880 (Figure 3), and Solana (SOL) to $8 (Figure 4), all three did make strong recoveries by March 2024.

Bitcoin soared to a new all-time high on March 11, 2024, with both Ethereum and Solana also having made significant gains, coming within 15% to 18% of their respective peaks. At the same time, ADA only managed to recover to a level still 74% below its ATH, in March 2024 (Figure 5).

This stagnation, despite the broader market’s upward momentum, casts a shadow over ADA’s bullish prospects.

ADA indeed saw a notable rise, achieving a 3.4x return from its 2022 low to its 2024 peak. However, this trend is not unique to ADA. Historically, Bitcoin rallies tend to lift the entire cryptocurrency market, making it profitable to invest in a wide range of tokens.

As the 2025 bull market looms, Cardano (ADA) will likely rise alongside the broader crypto market. Still, a critical question persists: Will ADA continue its trend of underperformance seen over the past three years or will it finally outperform other assets?

The answer hinges on whether Cardano can break out of its current cycle of stagnation and deliver tangible results that meet the high expectations of its community and investors.

Why Millions of Cardano Investors Are Bagholders

The current state  of the network shows a striking disparity: Approximately 75%, or about 3.37 million wallets, are at a loss, while only 21.3%, or 973,000 wallets, are in profit (Figure 6).

The remaining wallets hover around breakeven, with their holders apparently contemplating whether to stay invested or exit before it gets worse. Notably, 75% of all wallets have held their ADA for a year or more (Figure 7).

Some might see this as a testament to the resilience of the Cardano community, with long-term holders embodying the spirit of true HODLers, often referred to as having “diamond hands.” However, this perspective could be considered overly optimistic, potentially glossing over a more unsettling reality.

These wallets are largely held by bagholders, those who are stuck not necessarily because of their unwavering belief in the project—though that may also be a contributing factor—but because they feel trapped. They might have refrained from selling, unable to face the harsh reality of their losses.

During the 2021 bull market, the 0-100 ADA and 100-1,000 ADA wallets saw significant growth (Figure 7). This suggests that numerous investors joined in at the peak of excitement, following the green candles.

One might argue that as prices dropped, some investors sold off their assets while others took advantage of the dip, thus keeping those smaller wallets active. However, the numbers tell a different story.

At its peak, a wallet holding 1,000 ADA was valued at around $3,100. Fast forward to today, and that same wallet is worth just about $310, a mere tenth of its former value, at the time of writing. This dramatic decline primarily impacts retail investors, rather than the large-scale institutional players.

Approximately 80.67%, or 3.6 million wallets, hold less than 1,000 ADA. Moreover, 89.95%, or 4.01 million wallets, hold less than $1,000 worth of ADA, as shown in the tables below .

Cardano Is Losing the Adoption Game

Examining daily active wallets (DAWs) reveals a compelling argument that many Cardano users are simply holding onto their tokens with minimal engagement. This trend suggests that a significant portion of these users are likely retail investors with limited knowledge of crypto or finance.

Looking at the 90-day average, Cardano ranks near the bottom among layer-1 (L1) smart-contract platforms, with only about 36,000 daily active wallets (Figure 8).

This carries weight because Cardano has been in the market since 2017. In contrast, newer tokens like Solana, Sui, Aptos, and Ton, which launched more recently, already boast hundreds of thousands of daily active wallets.

A straightforward method to determine whether a project is overvalued or undervalued is by dividing its market cap by its daily active users. This calculation yields a figure that acts as a valuation proxy.

A higher number suggests the project is more overvalued, while a lower figure indicates it is more undervalued. When applying this metric, Cardano emerges as the second most overvalued L1 smart-contract platform, trailing only Ethereum (Figure 9).

However, relying solely on this metric to assess a project’s value or future potential is insufficient. A single metric cannot encapsulate the full complexity of a blockchain network. Therefore, exploring other data points for a more comprehensive evaluation is essential.

To further understand Cardano’s current state, we can look at its daily transaction count and volume. These figures provide a literal snapshot of the platform’s true activity levels. Daily transactions reveal one crucial detail: How frequently the platform is being used.

Cardano’s blockchain activity has been notably subdued, averaging just 131,000 transactions per day over the past 90 days (Figure 10). In stark contrast, other layer-1 networks, with the exception of Avalanche (AVAX), are buzzing with activity, while Cardano’s slow and steady approach is seen as too sluggish.

Daily transaction volume offers a different view of Cardano’s activity (Figure 11). Averaging $345 million over the past three months, it occupies a middle ground, performing steadily without making waves.

And here lies the paradox: Cardano’s daily transactions indicate low activity, but the overall volume suggests otherwise. This volume encompasses total trading, including centralized exchanges (CEX), not just decentralized exchanges (DEX) or on-chain activity.

When we look exclusively at on-chain data, the daily volume drops significantly to around $2.5 million, according to TapTools .

The low numbers of daily active users and transactions begin to make sense. On average, each DAU executes about four transactions every 90 days, each valued at around $28. It raises concerns about whether Cardano is fulfilling its intended purpose or if most of the activity is occurring elsewhere, leaving the on-chain ecosystem underutilized.

Cardano’s TVL Is Failing to Impress, But Is It Really?

The next data point to examine is the Total Value Locked (TVL). According to DefiLlama, Cardano’s TVL is roughly $189 million. While it may appear a substantial amount, it accounts for just 1.5% of Cardano’s market capitalization (Figure 12).

To better grasp this, one can divide the TVL by market capitalization to compare it across different chains. As observed before with DAU, a higher ratio indicates overvaluation, while a lower ratio suggests undervaluation.

When that comparison is made, it becomes clear that Cardano, as well as Ton, is significantly overvalued within the realm of L1 smart-contract platforms (Figure 13). Adding to this, Cardano is ranked 29th by TVL and represents only 0.24% of the total DeFi market.

The reason the staked ADA is not included in TVL is straightforward—TVL stands for “Total Value Locked.” By definition, TVL measures the value committed or locked into smart contracts within DeFi protocols. Staked ADA, on the other hand, is not truly locked in this manner.

When ADA is staked, it remains liquid, allowing you to trade, transfer or use your ADA while it’s staked. It doesn’t meet the “locked value” criteria because there’s no constraint on its movement. This is one of Cardano’s advantages, compared to many other platforms, where staking often involves strict locking periods or penalties for early withdrawals.

In defense of Cardano, the platform boasts an impressive 22.64 billion ADA staked, representing about 63% of its total supply. This high level of staking participation places Cardano among the top L1 smart-contract platforms, surpassing even ETH and BNB, despite those platforms having higher daily active users and other stronger metrics.

The high staking rate is a sign of users’ confidence in the network. Stakers trust the platform enough to keep a significant portion of their ADA within the ecosystem, showcasing a commendable level of engagement.

Cardano’s Ecosystem Is a Ghost Town

One reason for Cardano’s low TVL is that many of its projects don’t even register in the TVL metrics. However, a project’s liveliness can still be measured by the activity within its ecosystem.

CardanoCube  (Figure 14) indicates that there are hundreds of projects on the platform. Additionally, an August 2024 report from IOHK  states that 1,373 projects are currently building on Cardano. Still, a closer look uncovers some discrepancies.

Firstly, in June 2024, IOHK ceased reporting the number of projects officially launched on the Cardano ecosystem. Per this final report , 172 projects had been launched by June, which is a commendable figure (Figure 15).

Going back to the earliest available development report  from April 2022, there were 892 projects building on Cardano, with 45 of them launched (Figure 16).

In just over two years, the number of projects in development has nearly quadrupled and the number of launched projects has increased by 54%. However, out of the initial 892 projects, only 127 had launched by then, representing roughly 14%.

When applying that same logic to the more recent figure of 1,373 projects, only 9.2% have launched. In other words, the majority of the projects are still in their initial development phase, with little tangible progress to show.

Let’s take a closer look at Cardano’s transaction data. According to Cexplorer , in the most recent epoch, only 46 contract addresses and dApps exceeded $10,000 in transaction volume. It’s worth noting that each epoch on the Cardano network spans five days.

While Cexplorer records around 1,280 entries, not all of them represent unique projects. Some contract addresses are repeated for different functions within the same project.

For example, VyFinance appears multiple times, such as “VyFinance · VyFi: LP Order Process 140” and “VyFinance · VyFi: LP Order Process 103.” However, having only 46 active projects with a volume exceeding $10,000 is still relatively low.

Another source, Danogo’s statistics page —a decentralized bond exchange on Cardano—also confirms this limited activity. Only 21 projects saw transaction volumes of $10,000 or more, and over the past 30 days, just 11 projects had more than 1,000 active wallets (Figure 17).

On top of that, according to a report from AlphaQuest , 74% of Cardano’s projects have become defunct. The criteria for this status include having a 24-hour transaction volume of less than $1,000, liquidity below $50,000, Twitter accounts with no updates for over three months or deleted, websites that are down and being delisted from CoinMarketCap.

CardanoCube features a “graveyard”  section that lists abandoned projects on Cardano. However, we won’t dwell on that, as every blockchain has its share of failures.

The key point is that currently, most projects in the ecosystem are either in the building or testnet phase. The ones that are live have little to no adoption, making it feel like a ghost town.

Cardano’s ecosystem, much like a well-built structure, holds immense potential for habitation and productivity. However, without active users and significant dApp engagement, this potential remains largely theoretical rather than realized.

Cardano Lags in DEX Volume

In addition to the low adoption of dApps and low TVL, Cardano’s decentralized exchange volumes further underscore this issue.

According to crypto analytics platform Artemis Terminal, Cardano’s average 90-day DEX volume stands at around $2.96 million (Figure 18). This figure is the lowest among major L1 smart-contract platforms.

The data indicates that the adoption of decentralized applications on Cardano has yet to achieve significant traction.

Applying the same valuation method as before—market capitalization divided by DEX volume, similar to the approach used for DAU and TVL—reveals that ADA is the most overvalued chain by this metric, by a significant margin (Figure 19).

Cardano Holds Its Ground in Crypto Search Trends

Interestingly, historical Google Trends data (Figure 20), which measures search interest on a scale from 0 to 100, shows that over time, Cardano’s interest level has remained relatively consistent with that of Bitcoin and Ethereum.

In simple terms, ADA maintains relevance and public interest, much like the two largest cryptocurrencies.

Cardano’s Innovation Might Be Its Own Worst Enemy

Cardano’s choice to use Haskell seems to align perfectly with its goal of creating high-assurance environments where precision is everything. The inherent rigor of Haskell makes it a strong candidate for formal verification, ensuring that smart contracts perform exactly as intended, without any unexpected behavior.

But what if the very qualities that make Haskell so appealing are also the factors that hinder the progress? Could the emphasis on precision and mathematically provable code come at a cost?

Haskell isn’t popular. In fact, only 0.64% of the world’s programmers use it, according to the 2024 TIOBE Index .

This scarcity turns the search for developers into a hunt for rare talent. Consequently, while Cardano’s reliance on Haskell may enhance security, it also slows down the development and maintenance of projects, constrained by the small pool of developers proficient in the language.

Despite this challenge, Cardano consistently ranks among the top three for weekly core commits and active core developers, trailing only Ethereum and Solana. While the Haskell bottleneck might appear to be a flaw, Cardano’s core developers are pushing forward at a pace that keeps the platform among the top players (Figure 21 and Figure 22).

However, the broader reality reveals ongoing struggles within Cardano’s ecosystem. Despite robust core development, the ecosystem remains relatively small, with only 36 sub-ecosystems and 2,940 repositories . This is particularly evident when compared to its competitors.

The development work might be strong at its foundation, but it’s not spreading out effectively. The number of developers actively working across different areas is limited, which constrains the ecosystem’s growth and expansion.

The rationale behind Cardano’s decision is clear: Formal verification is crucial. It’s preferable to have smart contracts that are fail-proof, secure from exploitation and function as intended.

Although languages like Python or Rust may get the job done faster, they lack the inherent structure that makes formal verification as effective.

When dealing with straightforward problems, Haskell can seem sluggish. At the same time, attempting to solve complex issues with Python often results in endless cycles of debugging and patching. Haskell sidesteps many of these headaches, such as common bugs in Python or Java like the notorious NullPointerException, which are non-existent in Haskell.

Yet, Cardano isn’t solely defined by Haskell. The ecosystem supports  a variety of languages for smart contracts, including Aiken (Rust-like), Marlowe and Plu-ts (both TypeScript-based), OpShin (Python) and Scalus (Scala). Despite this broad range, the reputation persists.

When people hear “Haskell,” it often discourages them. Perhaps the issue lies in perception. Cardano can seem like a fortress of complexity, and many developers simply don’t have the patience to get through the gate.

This creates a cycle: The challenging and slow development process, paired with Cardano’s research-driven approach, results in a limited number of dApps. Fewer dApps translates to fewer active users.

With low user engagement, developers find little incentive to build on Cardano, which further restricts the creation of dApp (Figure 23). Until this cycle is broken, the platform will continue to struggle to realize its full potential.

Moreover, Cardano’s complexity extends beyond its programming language. The platform uses an extended UTXO (eUTXO) model, which handles state differently than Ethereum’s account-based system.

The eUTXO model is powerful. It seamlessly manages multiple actions within a single transaction, such as moving assets and interacting with multiple smart contracts, all without any hassle.

The unfamiliar logic of UTXO-based systems makes the learning curve steeper. And so, while Cardano theoretically offers greater scalability, it comes at the expense of ease.

For developers accustomed to Ethereum, Cardano’s system can feel like a maze. It compels them to reconsider how state and transaction logic operate. Unlike Ethereum, which has a single global state updated with each transaction, Cardano employs a different approach.

In Cardano’s eUTXO model, each user manages their own part of the network. This enables improved parallelism and concurrency, allowing multiple transactions to happen simultaneously without the need for continuous updates to a central state.

Also, Cardano offers innovations such as native liquid staking, allowing ADA holders to earn rewards without locking up their tokens. On the flip side, innovations require time to come to fruition and in our fast-paced world, time can be a relentless adversary.

The crux of the problem is a sobering reality: Cardano could have the finest technology, the most secure smart contracts and an extensive range of decentralized applications. But until the ecosystem sees real-world use and adoption, the dialogue will continue to be speculative.

The potential is undeniable, but potential alone doesn’t shape the future—it’s the real-world users who do. Without them, the platform remains a well-designed shell, waiting for substance.

Cardano is set to remain a significant player in the market, supported by a steadfast community of investors. As the 2025 bull market approaches, Cardano’s value is likely to surge. Nonetheless, Bitcoin enthusiasts might still question the merit of holding ADA, contemplating if the investment was worthwhile.

Some may argue that price isn’t the ultimate measure of success, but the reality of seeing a project remain at bear market levels, caught in a cycle of unfulfilled potential, is undeniably disheartening. The question, then, isn’t whether Cardano is dead, but whether it can finally deliver on its promise.

Correction: This article was edited to remove a reference to staked ADA being excluded from Cardano’s TVL and how that compares to other chains.

CCN Reports is a regular series that delves into the details to provide in-depth analysis of cryptocurrencies and the companies associated with them. We aim to engage a global audience interested in what’s what, who’s who and perhaps even why’s that.

About the Author

Toghrul Aliyev

Toghrul Aliyev is a senior cryptocurrency research analyst who began his journey in crypto in 2021. It all started with a Reddit post that went viral, leading to a writing position while he was still in medical school. As he learned more about crypto, he became deeply interested in it and decided to focus entirely on this field after completing his medical degree and becoming a doctor. Toghrul specializes in thorough research, always aiming to find details others might miss. He also has a strong understanding of stocks, real-world asset tokenization, and related areas. He is skilled in Python and SQL, which he uses to improve his crypto analysis through data analytics and data science. When he’s not working, Toghrul enjoys sports, hiking, reading philosophy, such as Seneca's works, and playing story-driven video games.

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