With the thawing of crypto winter, the Cardano ecosystem saw a significant increase in USD total value locked (TVL), soaring 166% quarter-on-quarter and 693% year-on-year.
Cardano (ADA) showed notable progress during the fourth quarter (Q4) of 2023, outperforming its competitors and demonstrating impressive growth across key metrics, according to a report by Messari.
Average Daily Transactions Soar in the Fourth Quarter
The report highlights that USD ADA revenue increased 66.7% quarter-on-quarter (QoQ), driven not only by ADA price action but also a 10.6% QoQ increase in ADA-denominated revenue.
Furthermore, the Cardano Treasury balance expanded by 2.6% quarter-on-quarter, reaching 1.43 billion ADA, in line with the growth trends seen in previous quarters. Currently, 20% of transaction fees contribute to the treasury, which can be adjusted through governance.
Another key metric, transactions, shows that Cardano saw 10.9% quarter-on-quarter growth in average daily transactions, outpacing the 1.6% quarter-on-quarter growth in daily active addresses. The ratio of transactions to active addresses has increased steadily over the past year, indicating an increase in power users. In the fourth quarter, the ratio of transactions to active addresses increased 9.2% sequentially and 45.0% year-over-year (YoY), reflecting higher average activity per user due to the introduction and development of several protocols throughout 2023.
In terms of participation, active participation decreased by 0.5% quarter-on-quarter for the second consecutive quarter, amounting to 22.8 billion ADA. Engaged participation also remained relatively stable in the second half of 2023. However, active and engaged participation saw a year-over-year decline of 10.2% and 9.6%, respectively.
Cardano TVL Reaches New Milestone
The Cardano ecosystem saw a significant increase in USD total value locked (TVL), soaring 166% quarter-on-quarter and 693% year-on-year. Indigo emerged as the largest TVL protocol, surpassing Minswap.
The TVL of stablecoins on Cardano increased 37% QoQ and 673% YoY, with the addition of Mehen’s USDM fiat-backed stablecoin scheduled to launch in March. Notably, TVL in USD reached an all-time high of $449 million on December 14, representing 166% growth in the fourth quarter. This increase contributed to Cardano’s rise in the TVL rankings from 15th to 11th during the fourth quarter, following its initial position of 34th at the beginning of the year. ADA-denominated TVL also hit an all-time high, peaking at just over 700 million ADA.
According to the report, Cardano’s TVL growth was primarily driven by the introduction of new stablecoins, namely iUSD and DJED, in early 2023. Stablecoins remained a crucial indicator of the health of decentralized finance (DeFi), as the total value locked in stable assets increased by 36.8% to $21.5 million.
Cardano stablecoin market capitalization also improved from 54th to 32nd place among other networks. However, non-fungible token (NFT) activity declined during the fourth quarter. Transactions and trading volume in the NFT space decreased by 8.0% and 33.8% quarter-on-quarter, respectively.
Each year, NFT transactions and trading volume decreased substantially, by 58.3% and 68.3%, respectively. The only metric that showed growth in 2023 was the number of unique sellers, which increased 213.2% year over year, with an average of 270 unique sellers per day.
The ADA price increased by 127.2% quarter-on-quarter, outpacing the overall crypto market increase of 53.8%. This fourth quarter increase contributed to ADA’s year-over-year change of 145.2%.
Therefore, ADA continues to show significant gains with its current trading price of $0.5724. This reflects a significant increase of 5.5% in the last 24 hours and 8% in the last 30 days. These figures further solidify the token’s bullish momentum as the market enters the mid-Q1 of 2024.
By Audy Castaneda
