Cardano Users Loyal: On-Chain Data Shows ADA Is Surprisingly Undervalued

IntoTheBlock analysts note that as of mid-August, Cardano processes roughly $7.2 billion in daily on-chain volume—a number higher than many other fringe networks.

While the beauty of crypto and blockchain is in its dynamism, there is overwhelming evidence that developers are always hunched, working on the next big project.

Ethereum is a shining example, thanks to its ability to support smart contracts, but there are multiple others.

Think of the BNB Chain, Solana, and all the innovations, from DeFi to NFTs , launched on these rails.

After working on building on the security of Bitcoin and enabling smart contracts, Cardano is now shining bright.

Cardano Needs To Attract New Users

True, there is work being done, but many analysts hail the blockchain as a formidable alternative to Ethereum.

Yes, users need to be pushed up and innovators need to deploy even more dApps.

Even so, looking at the numbers, there are solid indications that the future is promising.

Over the last year, on-chain data by IntoTheBlock shows that the number of addresses holding ADA has stabilized above 4.45 million.

The number is impressive in itself, even though this plateau comes after a period of rapid expansion, mostly in DeFi.

Cardano needs to attract new users, which may be difficult, especially with the rise of highly scalable and low-fee alternatives like Ethereum layer-2 solutions and other chains like Solana, the BNB Chain, and Avalanche.

While onboarding new users and growing the network might take time, Cardano is impressive and resilient. So far, IntoTheBlock data shows that transaction count and active user base remain stable, meaning the community is, after all, engaged.

The sustained activity points to a loyal and dedicated core user base that will not defect but support the network even though the competition is cutthroat.

Is ADA Undervalued?

Cardano processes roughly $7.2 billion in daily on-chain volume. This metric pushes Cardano’s Network Value to Transactions (NVT) ratio to 2.62.

The higher daily on-chain volume and low NVT point to the possible undervaluation of ADA, the native token.

ADA is currently trading at $0.34, stable but within a bullish formation.

If prices push higher, closing above $0.35, there might be more room for growth, possibly to $0.45 and $0.80 as buyers flow back.

The confidence among long-term ADA holders could accelerate the leg up.

By mid-August 2024, the ADA held by this cohort is at an all-time high as they now control approximately 40% of all ADA in circulation.

Transition To Voltaire, Fresh Hydra Head Update

Other drivers will include the eventual transition of all nodes into the Voltaire era after the Chang hard fork activation by the end of last month.

Cardanoscan data shows that nearly 30% of all stake pool operators are Chang-ready.

In Voltaire, ADA holders will play a key role in determining the direction the platform takes as Cardano governance is decentralized.

Cardano is also pushing hard to scale.

On 9 August 2024, Cardano developers introduced version 0.18.0 of its Hydra Head layer-2 scaling solution.

This update allows users to withdraw funds from a Hydra Head without necessarily closing the channel.

Once Hydra goes live, Cardano will rapidly scale, allowing users to process transactions off-chain cheaply and securely.

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.