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Cardano Consolidates as Stablecoin Ecosystem

Cardano Consolidates as Stablecoin Ecosystem

The capitalization of stablecoin cryptocurrencies has grown 673% in the last year in the network created by Charles Hoskinson.

Cardano Consolidates as Stablecoin Ecosystem. The Cardano network appears to be establishing itself as an ecosystem for stablecoin development: Cryptocurrencies whose value maintains parity with another asset, such as the dollar. The capitalization of this type of digital asset in Cardano increased by 673% in 2023. According to a recent report by analytics firm Messari, the total locked value (TVL) of stablecoins in Cardano has experienced a 37% increase in the last quarter of last year, reaching $21.5 million.

One of the main contributors to this expansion of stablecoins on Cardano is iUSD. Messari considers iUSD as the “backbone” of these currencies on the network. The launch of iUSD in early 2023 was critical to trigger significant growth in Cardano’s LTV. It is worth clarifying that iUSD has been a failed stablecoin. iUSD has remained disconnected from the USD for five consecutive months. At the time of this publication, iUSD is trading at $0.8.

iUSD Price Evolution
iUSD Price Evolution (Source: CoinGecko)

Messari’s report highlights that stablecoins on Cardano have proven to be a solid indicator of the health of the decentralized finance (DeFi) sector. Currently, the Cardano network ranks 34th by market capitalization for stablecoins, according to DeFiLama data. Stablecoins on Cardano have become critical for activities such as liquidity, lending, leverage, and providing quick solutions to market volatility, Messari says.

Stablecoins such as USDT and USDC (the largest by market capitalization) are also available on Cardano, thanks to the Wanchain network. USDT availability allows Cardano to connect with Bitcoin, Ethereum, TRON, and other networks. The bridged versions of Bitcoin and USDT/USDC have created a “huge liquidity opportunity for Cardano DeFi,” Messari notes.

A new stablecoin on the doorstep

Next on the horizon for Cardano is launching a new stablecoin called USDM, backed 1:1 with US dollars. The new stablecoin differs from iUSD and the other DJED network stablecoin, which are algorithmic and synthetic. The report notes that users prefer different architectures. USDM will be the first of its kind in Cardano. It gets backed by fiat money (just like USDT or USDC). Developers plan to launch it next March 16.

USDM developers describe it as a base asset for DeFi protocols, which will enable instant on-chain payments. “Our vision is to be a scalable catalyst for growth and adoption of the entire Cardano ecosystem,” they detail.

Charles Hoskinson delivers optimism around Cardano.

Mathematician Charles Hoskinson, founder of Cardano and former co-founder of Ethereum, has recently strengthened bullish sentiment on Cardano (ADA) via a tweet. Responding to a tweet from a Cardano enthusiast regarding the expected rise in Cardano’s Treasury, Hoskinson expressed his pride. A Cardano user and follower, @StakeWithPride, posted his expectations about the Cardano Treasury. He expects the treasury to reach a fiat currency equivalent of $4.5 billion when ADA peaks at $3. The last time ADA reached this all-time high was at the end of August 2021. Back then, the Treasury held approximately $1.7 billion in ADA. As reported by U.Today, at the end of August 2022, the Treasury holds $1 billion in ADA. The number is equivalent to a $437 million stake.

The user describes Cardano as “a decentralized network state that funds its destiny.” Hoskinson proudly retweeted this message. He added an animated GIF of an old video game, showing his support for ADA’s bullish sentiment. The Cardano Treasury supports projects based on this platform. Those wishing to claim a small part should join the Cardano ecosystem and start contributing value, such as developing a project on Cardano with tools based on this blockchain.

Hoskinson expresses concerns about AI

In a recent tweet, the Cardano founder expressed concerns about future AI-based products. He commented on an article in the British tabloid The Sun, which claimed that “AI-based brides” could become “gold-diggers” interested in men’s money in the future.

Hoskinson believes that, due to AI, trust issues are likely to grow in the future. Previous statements by the billionaire show that he expects AI to bring more harm than good (he has not yet mentioned positive aspects). In December, Hoskinson commented on a fake video created with an AI app. It generated a false version of him indistinguishable from reality. Hoskinson warned these deepfake creation technologies are more sophisticated and that it will be impossible to distinguish between a real video and a fake very soon.

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