Cardano [ADA] sees a decline in key growth metrics in Q4 2022

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  • Car­dano suf­fered a decline in finan­cial met­rics in Q4 2022.
  • How­ev­er, the dai­ly trans­ac­tions dApp trans­ac­tions count ral­lied dur­ing that period. 

House to over 1000 decen­tral­ized appli­ca­tions (dApps), a new report from Mes­sari revealed that the lead­ing Lay­er 1 blockchain Car­dano [ADA] saw growth and some cor­re­spond­ing declines in Q4 2022. 

Titled “State of Car­dano Q4 2022,” Mes­sari found that due to the unex­pect­ed col­lapse of cryp­tocur­ren­cy exchange FTX in Novem­ber, there was a down­turn in Cardano’s finan­cial met­rics like mar­ket cap­i­tal­iza­tion and rev­enue, as well as activ­i­ty met­rics such as the count of active address­es and total val­ue locked (TVL) on the network. 

Nonethe­less, despite the hit suf­fered by the entire mar­ket due to FTX’s fall­out, Car­dano logged incre­ments in dai­ly trans­ac­tions count, dApp trans­ac­tions, and engaged stak­ing activity. 

Read Car­dano (ADA) Price Pre­dic­tion 2023–24

The quarter came with a few bad tidings

Per the report, the 90-day peri­od under review was plagued by a sig­nif­i­cant decline in Cardano’s revenue. 

Accord­ing to Mes­sari, Cardano’s rev­enues are “tight­ly cou­pled with fees as they are the source of revenue.” 

As such, the 36% decline in trans­ac­tion fees paid on the net­work in Q4 2022 cul­mi­nat­ed in a 28.3% cor­re­spond­ing decrease in rev­enue dur­ing the same period.

Source: Mes­sari

In addi­tion to a decline in rev­enue, FTX and Gen­e­sis’ col­laps­es caused Cardano’s DeFi TVL (USD) to “decline through the 2022 bear mar­ket” and to take “a fur­ther 34.8% decline in Q4,” Mes­sari found. 

Although Cardano’s TVL (ADA) increased by 16.2% in Q4 2022, Mes­sari not­ed that the steady decline in TVL (USD) dur­ing that peri­od was due par­tial­ly to ADA’s price drop. 

Mes­sai found a fur­ther drop in Cardano’s mar­ket capitalization/ TVL ratio. The report stated,

“Cardano’s mar­ket cap / TVL ratio decreased 10.8% to 169.5 in Q4. This ratio is still orders of mag­ni­tude larg­er than that of the main DeFi play­ers, indi­cat­ing Cardano’s DeFi ecosys­tem is small­er in both absolute terms and rel­a­tive terms.” 

Source: Mes­sari

Regard­ing NFT sales in Q4 2022, Car­dano saw a steep fall. Accord­ing to Mes­sari, the net­work had a sig­nif­i­cant­ly low­er num­ber of unique sell­ers per day than com­peti­tors Flow and Polygon. 

For most of the quar­ter, NFT trad­ing vol­ume was flat, with a momen­tary spike in activ­i­ty in Octo­ber due to the launch of OREMOB, an ani­me pro­file pic­ture (PFP) project. 

Source: Mes­sari

How much are 1,10,100 ADAs worth today

Here lies the silver lining

While Cardano’s finan­cial met­rics closed Q4 2022 post­ing declines, the chain’s dai­ly trans­ac­tions, and dApp trans­ac­tions ral­lied by 13% and 16%, respectively. 

In addi­tion, accord­ing to Mes­sari, devel­op­er activ­i­ty on Car­dano inten­si­fied dur­ing that peri­od as many projects flocked to the chain. Mes­sari noted:

“In Q4, devel­op­ment occurred in areas such as sta­ble­coins, syn­thet­ic assets by Indi­go Pro­to­col, and new NFT projects.” 

As for stak­ing on the chain in Q4 2022:

“Cardano’s active stake is at an all-time high of almost 25.5 bil­lion ADA. Engaged stake has increased QoQ and YoY, sug­gest­ing that the ADA issued to pool oper­a­tors and del­e­ga­tors is being staked after it’s received. Engaged stake has peaked at the end of Q4 at near­ly 74%.”

Source: Mes­sari

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