The report bluntly advises investors to get rid of Cardano, citing the lack of meaningful usage of its native token, ADA.
K33 Research, a prominent organization in the cryptocurrency research sector, published a scathing report on Cardano (ADA), sparking widespread discussion in the crypto community.
In a detailed examination, K33 Research claims that the Cardano network suffers from a significant lack of practical application, which is essential to the inherent value of its native token. The report states that “A smart contract network needs meaningful usage for its native token to have any value. The Cardano network, however, has no meaningful use or credible avenue to achieve this.”
Sell All ADA Now?
Addressing the counterargument often put forward by Cardano supporters regarding the network’s daily transactions averaging around 90,000, the report argues that these do not amount to significant blockchain activity. The report further details: “There is nothing more happening on the Cardano Network than exchange transfers and a group of exchange holders manufacturing blockchain activity.”
K33 Research highlights the absence of external evidence supporting any significant activity on the Cardano network, comparing it to other protocols where actual activity is corroborated by external evidence. The research company calls this lack of external validation “proof by contradiction.”
One of the most telling indicators of inactivity, according to the report, is the situation of stablecoins on the Cardano network. K33 Research notes that the absence of major stablecoins like USDT and USDC on Cardano is a clear indicator that no significant decentralized finance (DeFi) activities are taking place. The only stablecoins present are reportedly collateralized by Cardano and valued at 76 cents on the dollar, which is referred to as “another word for nothing.”
Future Prospects for Cardano
K33 Research is pessimistic about the future of Cardano and draws parallels with other blockchain projects that started without traction and then became irrelevant. The report notes that successful blockchains evolve over time, while “creationist, big-idea, subsidized-startup, no-real-use blockchains” eventually lose their luster. He cites examples like IOTA, NEO and EOS to illustrate this pattern.
Despite Cardano’s current market valuation of $19 billion, K33 Research attributes this to its availability on several exchanges and its appeal to new cryptocurrency investors. The report criticizes the narrative surrounding Cardano, describing it as “scientific nonsense” that could mislead newcomers.
“Ada is a well-established coin that can be traded ‘everywhere’, also on smaller local exchanges, making it one of the coins to be ‘pushed’ to aspiring cryptocurrency investors. Cardano also has an attractive story for newcomers, as Cardano is branded as ‘the blockchain network powered by peer-reviewed research,’” the report mentions.
However, K33 Research foresees a decline in this attractiveness and predicts that the number of new investors attracted to Cardano will decrease. Additionally, K33 Research casts doubt on ADA’s long-term viability, citing a lack of rebound in its price compared to other strong smart contract tokens during recent market rallies.
K33 Research claims that the market does not quickly eliminate such coins, but rather “bleeds” them over time. The report concludes: “Things never happen overnight and these processes often take years to fully develop. Still, all price signals also point to Ada gradually disappearing from the crypto map.”
According to CryptoPredictions, ADA price for today (16.01.2024) is forecast to be in the price range of $0.45177172856339 – $0.6643701890638. Cardano price is forecast to end at $0.53149615125104 today.
By Audy Castaneda
