Cardano (ADA) prices jumped and fell on the same day, beginning with the euphoria surrounding the opening of its first decentralized exchange, the DEX SundaeSwap, and then following Bitcoin’s slump.
SundaeSwap’s Successes and Failures
The price of ADA has risen by around 10% in the last week as a result of the release of Cardano’s beta version of its first decentralized app (DApp), SundaeSwap, a decentralized exchange (DEX) that allows token staking and aims to “decentralize not only access to financial services but also the core business model itself.”
“While the DEX’s smart contracts have been properly vetted and the DEX will exceed all industry requirements for security, the deployment of fully decentralised governance will not be achievable immediately due to existing transaction size constraints on the Cardano blockchain.”
SundaeSwap’s launch includes the addition of its utility token SUNDAE, which allows holders to vote on the governance protocol as well as trade, strake, and lend coins. The community will choose the coin’s price as proof of its decentralization ideals.
“The Sundae Token is a utility token that is essential to the SundaeSwap DEX’s smooth operation.” We are committed to developing the most usable decentralised exchange protocol possible, in keeping with the decentralised ethos in which we all believe. As part of that, we are adamant that this protocol belongs to us, the SundaeSwap community, not to the corporation that built the programme.”
They stated that at the protocol’s launch, 7% of the token’s community supply would be “locked by the DAO into a smart contract called The Taste Test,” and that at the end of ten days, “all of these tokens will be used to create the ADA/Sundae liquidity pool, establishing the initial price for the token.”
Users were unsatisfied with network congestion, orders lingering for hours, and failed transactions not long after trading on the DEX began. SundaeSwap’s crew had already forewarned them about this possibility before the launch.
“IF YOUR ORDER IS ON-CHAIN, IT WILL BE PROCESSED ORDERS ARE FAILING DUE TO CONGESTION, PLEASE BE PATIENT,” CEO Mateen Motavaf said in a bolds and caps statement.
“We want to inform you all that while orders may take days to complete, everybody’s orders will be treated equally and in the order, they were received,” the team wrote on January 8.
They are convinced that “after things settle down, the procedure can meet the typical day-to-day demand.”
Scalability of Cardano
The Cardano roadmap is currently concentrating on multiple improvements to optimize and scale the network, intending to achieve quicker transaction speeds and implement the layer 2 Hydra solution.
Its partner firm, Input Output, recently revealed a promising scaling update that is expected to boost the number of Plutus script memory units per transaction to 12,5 million. The first adjustment is scheduled to go into effect on January 25.
Aside from these issues, Cardano has already become stronger in its fight with Ethereum, with higher trading volume and lower costs at times.
Is Bitcoin to blame for the Cardano crash?
Today, Bitcoin is down roughly 10% to under $38,000. Simultaneously, the whole market capitalization dipped below $2 trillion.
Analysts have previously claimed that Bitcoin has a monopoly on the health of the crypto industry therefore, its decline could have an impact on other coins such as ADA.
Many aficionados were anticipating a bullish trend for the Cardano coin, hoping for its price to reach $2 as a result of future optimizations and the introduction of SundaeSwap, but this scenario has been ruined.
The SundaeSwap launch boosted Cardano up 7.5% from its day-low price of $1.32 to $1.42 before stabilizing at $1,40. Then, in line with the crypto market’s downward trend, ADA fell to roughly $1,20.
The market’s general slump coincided with widespread concern about a more hawkish Federal Reserve, which is expected to raise interest rates. It also occurred concurrently with Russia’s announcement of a crypto prohibition.
