Cardano (ADA) price surged and dipped on the same day, starting with the excitement around the launch of its first decentralized exchange, the DEX SundaeSwap, and then following the bearish trend of Bitcoin.
SundaeSwap Victories and Failures
The price of ADA had risen by around 10% last week due to Cardano’s beta launch of its first decentralized application (DApp) SundaeSwap, a decentralized exchange (DEX) that enables token staking and aims to “decentralize not only access to financial services, but also the core business model itself.
“We are launching with a beta label because, although the DEX smart contracts have been fully audited and the DEX meets all industry standards for security, the implementation of fully decentralized governance will only be not immediately possible due to existing transaction size limits on Cardano. blockchain.
The launch of SundaeSwap involves the inclusion of its utility token SUNDAE, which offers holders the ability to vote on the governance protocol, as well as to trade, bet and lend coins. The price of the token will be determined by the community as evidence of its decentralization goals.
“The Sundae Token is a utility token essential to the proper functioning of the SundaeSwap DEX. We are focused on building the most useful decentralized exchange protocol possible, in line with the decentralized ethos we all believe in. In this context, we firmly believe that this protocol does not belong to us, the company that wrote the software, but to us, the entire SundaeSwap community.
They explained that at protocol launch, 7% of the token’s community supply would be “locked by the DAO in a smart contract called The Taste Test,” and added that after ten days, “all of those tokens will be used to create the ADA/Sundae liquidity pool, establishing the initial price of the token.
Shortly after trading began on the DEX, users were unhappy with congestion on the net, orders waiting for hours and failed trades. The SundaeSwap team had already warned against this possibility before the launch.
CEO Mateen Motavaf responded to the complaints in a bold, all caps message that read “IF YOUR ORDER IS ON CHAIN IT WILL BE PROCESSED ORDERS FAIL DUE TO CONGESTION PLEASE BE PATIENT”.
The team wrote on Jan. 8, “We want to let you know that while orders may take days to process, everyone’s orders will be processed fairly and in the order they were received.”
They remain confident that “the protocol can meet the normal daily load once things settle down.”
The scalability of Cardano
Cardano’s roadmap is currently focused on several updates to optimize and scale the network, in hopes of achieving faster transactions and adopting the Hydra layer 2 solution.
Its partner company Input Output has just announced a promising scaling update that is supposed to increase Plutus script memory units per transaction to 12.5 million. The first change is expected to go into effect on January 25.
“Memory/CPU settings improvements for Plutus remain one of 11 ways Cardano intends to scale in 2022. Other ways include increasing block size, pipeline, ingress endorsers, node enhancements, disk storage, sidechains, Hydra Layer 2 scaling solution, Offload compute and Mithril solution.
– Enter exit
Problems aside, Cardano has already strengthened its competition with Ethereum, sometimes seeing higher transaction volume and lower fees.
Related Reading | Cardano enters the basho phase: how it improves performance
Bitcoin behind the Cardano crash?
Today, Bitcoin is down around 10% below $38,000. At the same time, the total market cap fell below $2 trillion.
Analysts have previously alleged that Bitcoin governs the health of the crypto market, so its downtrend could affect other coins like ADA.
Many enthusiasts were expecting a bullish trend for the Cardano coin in hopes of its price reaching $2 amid future optimizations and the launch of SundaeSwap, but this setup was spoiled.
The launch of SundaeSwap pushed Cardano up 7.5% from its daily low of $1.32 to $1.42 and then stabilized at $1.40. Then, following the bearish trend in the crypto market, ADA fell to around $1.20.
The general bearish trend in the market followed the general concern over a more hawkish Federal Reserve, expecting higher interest rates. This also happened alongside Russia’s announcement of a crypto ban.
ADA is trading at $1.2 on the daily chart – Source: ADAUSDT on TradingView.com
Related Reading | Cardano is hitting rock bottom? What you should consider before rushing into ADA
