Cardano (ADA), one of the largest and longest-standing proof-of-stake (PoS) cryptocurrencies, achieved ultra-low levels of inflation. Community enthusiast explains what it means for ADA economics and why it makes Cardano (ADA) a target for criticism.
Stable adoption for scarce asset: Cardano (ADA) community on 2.5% ADA inflation
Cardano (ADA), a large-cap altcoin on the proof-of-stake consensus, registered 2.5% inflation over the last 12 months. This is 6x lower compared to Avalanche (AVAX) and 4x lower compared to Polkadot (DOT). The calculations were shared by @cardano_whale, a pseudonymous Cardano (ADA) community speaker.
Even Cardano's (ADA) worst rival Ethereum (ETH) demonstrates twice larger inflation than Cardano (ADA). Bitcoin (BTC), the scarcest cryptocurrency, sees its inflation rate at 0.86% after the 2024 halving.
The ADA enthusiast stressed that should its inflation surge to the levels of its competing coins, the backlash would be massive:
Do the thought exercise for a moment what you might do if inflation on Cardano was 15%? Probably scream like crazy it’s the best thing ever, desperately searching for buyers, meanwhile selling for scarcer assets like BTC
As a result, the combination of massive adoption, a sustainable network economically and low inflation from scarcity makes Cardano (ADA) a “sweet spot” in 2024.
As covered by U.Today previously, Cardano (ADA) logged a major reliability milestone this month.
Vladislav SopovIts community participants celebrated its 2,500th day without network outages Aug. 2, 2024.
Cardano (ADA) DeFi TVL dips below $200 million
At the same time, Cardano (ADA) is still criticized by crypto X for low levels of network activity and the slow progress of its DeFi ecosystem.
As per DefiLlama data, Cardano's (ADA) total value locked (TVL) in decentralized finance (DeFi) protocols peaked on March 14, 2024, at over $468 million.
After the cryptocurrency's price drop, Cardano's (ADA) DeFi ecosystem plunged to $170 million, but it managed to slightly recover then.
Three DeFis, Minswap, Indigo and Liqwid, are responsible for over 50% of this TVL in USD-denominated numbers.
