Grayscale Report Takes A Deep Dive Into Cardano – In Good And Bad
The latest release of the Grayscale Building Blocks, a monthly publication from one of the leading crypto funds in the world, takes a look into Cardano.
The report focused solely on the third-largest cryptocurrency by market cap. The report went through various aspects of Cardano, including its creation, leadership, community, and so forth – in good and bad.
Cardano is the third-largest holding of Grayscale in its GDLC Fund (Grayscale Digital Large Cap Fund). This might be the reason why the asset manager has taken a vested interest in the asset and is educating its investors on one of its largest crypto holdings.
The report outlines the pros and cons of the Cardano network. Along with the upgrades, which are being carried out on the network to put it in a favorable position to compete with other large cryptocurrencies in the market.
Cardano vs the market
The way the Cardano network was structured had unveiled a flaw in its design – smart contracts. Once DeFi gained popularity, it became obvious that the Cardano blockchain would not be able to compete on the same level as Ethereum due to its lack of smart contracts capability. Developers had then begun to work on launching smart contracts capability on the network, which became a reality on September 12th, 2021. But it came years behind other leading smart contracts networks.
Now that smart contracts capability is in the Cardano ecosystem, the question rises: will users adopt it. There already exist blockchains with booming decentralized finance markets. So they would need a compelling reason to move over to Cardano.
“The trade-off of Cardano’s approach has also resulted in its biggest weaknesses, which include: a historical lack of smart contract capabilities, an unproven track-record for how well dApps will function, a still maturing third-party developer ecosystem, lack of widespread mainnet dApps, ad lower transaction fee revenue.”
There is still skepticism in the community as to how well decentralized applications will work on the blockchain, as the network is yet to be tested. Developers obviously have their work cut out for them.
Advantages of Cardano
The Grayscale report also details the advantages of the Cardano blockchain over others. Its leadership remains one of the strongest components of the project. The Cardano community has always remained loyal to founder Charles Hoskinson, who has continued to share his vision for the project with the community at every turn. As such, inspires continued support for the asset no matter how the price may be doing.
Decentralization is also an important feature of the Cardano blockchain. A fully open-source project, the Shelly upgrade had spread the core network consensus amongst thousands of participants. Its native token, ADA, is held by millions of people around the world and can easily be bought and sold on exchanges both big and small.
Also, the Cardano blockchain has strong funding sources. Its treasury balances currently sit at $1.6 billion, giving the network a competitive advantage when it comes to growing and upgrading its ecosystem as technology in the crypto space changes.
