Recent regulatory headwinds in the U.S. may have played a significant role in suppressing Cardano’s (ADA) price but did little to stop the cryptocurrency’s adoption.
Cardano has recorded impressive growth in the past year and a half, with the adoption of ADA nearly doubling in the United States. According to crypto analytics firm “Morning Consult” data, 7% of Americans (roughly 10 million people) currently hold ADA. Notably, as recently as January 2022, that figure stood at 4%, reflecting growth of almost 100%.
The surge in Cardano’s adoption can be attributed to its unique staking capabilities, which have attracted a growing number of users seeking to profit from their holdings. Staking is a decentralized financial service that allows users to earn rewards by holding and validating transactions on a blockchain network. In the past two or so years, staking has gained traction to generate passive income, with Cardano offering an attractive reward of just over 3% per year.
According to data from Staking Rewards, about 62% of all ADA in circulation is currently staked, showing that the practice has become an attractive option for investors. Now, Cardano ranks third after Ethereum (ETH) and Solana (SOL) in terms of crypto networks with the highest staking rewards. Furthermore, the popularity of centralized exchanges among U.S. users has further contributed to the significant number of stakers, with tens of millions of people potentially staking ADA through these platforms.
Cardano has also maintained a clear advantage over other cryptocurrencies in terms of decentralisation. The Cardano community has actively pushed for more decentralization through various platform advancements, particularly the Cardano Improvement Proposal CIP-1694. In late May, Charles Hoskinson emphasized the importance of decentralization, arguing that their goal is to construct Cardano in a manner that serves as a wake-up call for other cryptocurrencies.
On Friday, June 23, Cardano developer Input Output Global (IOG) launched “Project Catalyst”, a decentralized innovation fund of the Cardano ecosystem, to bolster the Cardano network’s development and growth. A significant sum of 50 million ADA tokens was also allocated for that purpose, making it the largest funding pool for the ecosystem to date.
“The Cardano ecosystem needs decentralized funding and innovation mechanisms for its future. We are in the age of Voltaire, and we think a lot about how people govern themselves and the entire ecosystem…when you’re building from the ground, you need a mechanism to enable that sort of innovation and growth, and that is the role of catalysts,” said Tamara Haasen, CEO of IOG.
Cardano’s architecture has also attracted large numbers of developers, primarily due to its enticing features, such as low fees and rapid transaction speeds. As a result, developers have been increasingly drawn towards the platform, with 1,259 projects now building atop the network and 130 already launched.