- Cardano’s (ADA-USD) promising project in Africa might come crashing
- ADA’s long-term profitability is likely to be less than other major cryptos
- ADA is currently 82% down from its all-time high
Cardano (ADA-USD) is one of the most significant cryptocurrency projects, and it is considered to be among the most promising. The primary reason for Cardano’s popularity is its project to promote ADA usage in Africa and its unique smart contract model.
However, Cardano’s ambitious projects are far from being implemented, and investors are slowly taking note. Therefore, Cardano’s decline has been more severe compared to other major cryptocurrencies. ADA is currently 82% down from its all-time high and has only had one short-term rally in March before continuing its decline.
In addition, Cardano’s main rival Ethereum (ETH-USD) continues to grow and develop. Ethereum’s next upgrade, called “the Merge,” will also make it a proof-of-stake (PoS) blockchain network. Once it happens, the rationale for developers to move to Cardano will be inconsequential as Ethereum’s energy consumption will decrease dramatically.
Moreover, another set of upgrades called “the Shard chains” will make Ethereum faster and will significantly reduce Ethereum’s gas fees.
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Even if these upgrades do not meet their deadline, Cardano still has a small time window to implement its projects before it’s too late. Unfortunately, Cardano is still sluggish in this regard, and it will face an uphill battle.
Even worse for Cardano, Ethereum has been able to utilize its first-mover advantage. Ethereum still dominates web3 development and has thousands of ERC20 tokens providing gas fees to the blockchain.
Most non-fungible tokens (NFTs) are bought using Ethereum, and most of the Metaverse tokens are also Ethereum-based. Thus, the idea of Cardano being an “Ethereum killer” seems far more unrealistic by the day.
Cardano’s Project In Africa
Cardano is also not doing well in terms of achieving utility in Africa. The ambitious project launched in 2017 does look fantastic on paper, but very little groundwork has been done in these four and a half years.
There have been various announcements and deals about African countries, with the latest deal inked with Ethiopia’s former education minister about bringing 5 million students‘ records to the Cardano blockchain. Almost all of them are still far from being fully implemented.
Agreements with no implementation add no value to the project and only create more disappointment as time passes. Moreover, Cardano’s programming language will only hurt its adoption as web3 developers used to traditional coding languages will avoid it. Consequently, the hype behind Cardano is now drying up.
Therefore, I believe that Cardano is overhyped due to the above reasons. Its long-term profitability is also likely to be less than other major cryptocurrencies, and investors should reconsider their positions.
On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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