Cardano Endures a Tough Week as ADA Gets Deposed by XRP

Nothing appears to be going right for the Cardano network at the moment. The smart contracts platform has suffered several setbacks on the market and ecosystem fronts this week.

First, it got rejected by 3air, a blockchain-based telecommunication firm with a mission of empowering Africa via its platform. The firm, which had previously agreed to collaborate with Cardano, cited several reasons for terminating its relationship with the Hoskinson-led blockchain project.

Meanwhile, ADA has struggled to keep up with the pace in the market. The native token on Cardano lost its spot to the embattled Ripple project XRP after the latter posted a massive price upswing taking its market capital above $41 billion. The troubles have further been compounded by criticism of ADA over its poor performance. Here are the details:

Cardano concedes sixth place in market rankings to the surging XRP

As per data provided by CoinMarketCap, ‘Ethereum killer’ Cardano has been dethroned in market capital rankings by Ripple’s XRP. The latter’s price has spiked since Monday when it embarked on a run that left its closest competitors in the mud. Before surpassing Cardano, XRP also upset Solana’s native token SOL.

Cardano is now ranked seventh with a market cap of $40 billion. Given that XRP’s token has gained over 45% in the last seven days, ADA has an uphill task to reclaim its spot.

Despite being toppled earlier this week, Cardano is still in a position to turn things around. The Cardano ecosystem received a boost last week following the proposal to increase the block size from 72KB to 80KB. With implementation expected to boost performance and throughput in the network, Cardano should soon recover upwards.

As of writing, ADA is trading in the green alongside the majority of the cryptocurrencies. The coin is hovering at $1.20 against the US dollar– up 15.38% over the last seven days.

It is crucial for ADA to retain its current momentum as a tumble could send the price of the token below $1.10. Such a case would be a fair cow considering it only cleared the $1.10 resistance last Friday.

Analysts share a positive feeling on Cardano, as they feel the token is currently the most undervalued it has been in the last two years. Santiment data shared on Twitter by crypto analyst Ali Martinez indicates that ADA hasn’t shown a Market Value to Realized Value (MVRV) as low as the current 365-day MVRV. This means that current price levels do not reflect the token’s actual value.

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Cardano swerved by blockchain-based internet firm 3air for an Ethereum L2

3air, a blockchain-based firm aiming to build a high-speed broadband internet connectivity platform available to African countries, has switched platforms from Cardano to Ethereum based layer two multichain SKALE.

Though the firm initially intended to use Cardano as its massively adopted in Africa, two major reasons have forced it to row back on its decision.

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A shortage of Haskell developers

3air chief executive Sandi Bitenc explained that the decision to shelve plans to build on Cardano was necessitated by the inability to find the necessary talent to develop on Haskell, Cardano’s programming language. Bitenc explained that having spent months looking for developers, the firm found a massive shortage in the market.

The EUTXO model remains unsuitable for smart contract dApps

The blockchain firm also noted that Cardano’s scalability issues presented concern. Bitenc suggested that Cardano’s EUTXO model is ill-suited and not good enough for building smart contract-based decentralized applications. The air boss added that until scaling comes along, it shall remain so.

With the change, the SKALE blockchain infrastructure should offer the network an immediate kickstart into development, which is expected to accelerate progressively. Further, the CEO noted the use of this network would provide the project with zero-gas transactions and the ability to leverage innovative scaling techniques.

Placeholder co-founder labels Cardano vaporware

Chris Burniske, a co-founder of the New York venture firm Placeholder, has labelled Cardano’s ADA as vaporware. He said this in response to a tweet by crypto analyst Benjamin Cowen, who had questioned Cardano’s consistent underperformance.

Burniske has held disapproval for Cardano for a while now. Last year, he said that the network was based on hype more than substance but clarified that the remarks did not necessarily mean Cardano would fail. Burniske is just another name in the list of Cardano naysayers, as other prominent persons in the venture investment circles have also questioned the viability of ADA.

Galaxy Digital CEO Mike Novogratz mid-last year equated Cardano to a community coin, referring to its valuation.  He argued that Cardano had come of a “weird cult.” Evidently, current data shows Cardano continues to lag other crypto coins.

TV personality and Dallas Mavericks owner Mark Cuban, who is usually all about usability, has also previously questioned Cardano, arguing that its actual value lies in its utility.

Criticism aside, Cardano is still advancing – the network reached three million wallets earlier this month. Estimates by crypto exchange Kraken indicate that 11,000 new wallets are created daily on the network.

To learn more about this token visit our Investing in Cardano guide.