Is Cardano’s ADA the Next Big Thing or Just a Government Fad? 🤔💰

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Is <a href="https://minority-mindset.com/ada-usd/">Cardano</a>‘s <a href="https://pricpr.com/ada-usd/">ADA</a> the Next Big Thing or Just a Government Fad? 🤔💰

On March 2, President Donald Trump, in a moment that surely left many scratching their heads, mentioned Cardano’s ADA (yes, that’s the name of a cryptocurrency, not a new diet fad) among the cryptocurrencies to be included in the US strategic crypto reserve. His March 6 executive order clarified that altcoins would be part of the Digital Asset Stockpile (DAS) under the “responsible stewardship” of the Treasury. Because nothing says “responsible” like a bunch of digital coins, right? 😅

ADA’s potential inclusion in a government-managed portfolio sparked industry-wide surprise and, at times, harsh criticism. While it has loyal investors who have supported it for years (bless their hearts), many in the crypto community were left wondering why on earth this token was included in the digital asset stockpile. It’s like inviting the kid who always forgets his lunch to the school picnic.

Let’s analyze the blockchain to see if ADA’s fundamentals and utility support its place in the US Digital Asset Stockpile. Spoiler alert: it’s a mixed bag!

The case for ADA in the US Digital Asset Stockpile

Launched in 2017 via an ICO, Cardano is one of the oldest smart contract platforms. It’s like the grandpa of cryptocurrencies, but with a research-driven design approach and a fancy delegated proof-of-stake mechanism combined with an extended UTXO accounting model. Sounds impressive, doesn’t it? But does it actually work? 🤷‍♂️

Cardano’s ambition as a smart contract platform is well captured by X ‘Cardano_whale,’ who outlined the blockchain’s “non-negligible fees, voting power, decentralized consensus, all native token trading paired with it.” It’s like a buffet of blockchain features, but are they any good?

The X post emphasizes ADA’s utility (something “most VC coins lack”) along with Cardano’s decentralized governance as key advantages. Because who doesn’t love a little decentralization with their crypto? 🍽️

Indeed, Cardano’s Project Catalyst is one of the largest decentralized funding initiatives in crypto. Through it, treasury funds from transaction fees and inflation are allocated democratically to community proposals. Unlike Ethereum, which still relies on offchain governance for major upgrades (cue the eye roll), Cardano aims to transition entirely to onchain governance. Because why not make things more complicated?

The Plomin hard fork that took place on Jan. 29 marked the transition to “full decentralized governance,” according to the Cardano Foundation. It grants ADA holders “real voting power—on parameter changes, treasury withdrawals, hard forks, and the blockchain’s future.” Sounds like a lot of responsibility for a bunch of digital coins!

Cardano’s native coin, ADA, is used for network fees, staking, and governance. Its maximum supply is 45 billion, with 31 billion initially distributed—26 billion sold in the public sale and 5 billion allocated to IOHK, Emurgo, and the Cardano Foundation. The remaining 14 billion ADA were reserved for gradual release through minting. With 0.3% of ADA reserves distributed as rewards every five days, ADA inflation declines as reserves deplete. The current inflation rate is approximately 4%, with a circulating supply of 35.95 billion ADA. So, it’s like a slow leak in a tire—just when you think it’s stable, it starts to deflate.

While a capped supply can support a coin’s value and justify its inclusion in the DAS, other ADA metrics, such as fees and staking yields, lag far behind competitors. It’s like being the last kid picked for dodgeball—nobody wants you.

Should Cardano’s lagging activity raise concerns?

Despite its years in the smart contract ecosystem, Cardano has struggled to generate enough activity to establish itself among the leaders. As a result, ADA’s limited usage within the crypto ecosystem raises concerns about its long-term value. It’s like trying to sell ice to Eskimos—good luck with that!

According to Messari’s Q4 2024 State of Cardano report, the blockchain processed an average of 71,500 daily transactions, with 42,900 daily active addresses. Quarterly fees totaled $1.8 million, a stark contrast to Ethereum’s $552 million in fees over the same period, according to CoinGecko. Ouch!

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2025-03-19 00:16