Key Insights
- Cardano plans to use the RealFi microloan projects and the Midnight sidechain to raise the total value locked in their system to billions.
- Integrating DeFi for Bitcoin and XRP could result in billions of dollars for Cardano’s ecosystem.
- Despite the growing DeFi usage, Cardano was able to maintain stability thanks to the recent network fork’s rapid security updates.
Charles Hoskinson, the founder of Cardano, has made public a plan that aims to boost the total value locked in the network to billions of dollars. He discussed the key initiatives and funding needed to grow Cardano’s DeFi ecosystem.
Cardano DeFi and Midnight Sidechain
Cardano has been criticized for having a low DeFi adoption even with a huge market cap. However, Hoskinson mentioned that the issue of the network’s TVL not being up to the mark is being solved through new implementations.
https://x.com/angrycryptoshow/status/1992659398330909138?s=20
One key project is the Midnight sidechain, currently in testnet. The project aims to attract multi-chain users and increase developer adoption. Hoskinson said Midnight’s zero-knowledge proof features will support privacy and scale Cardano’s DeFi ecosystem.
The NIGHT airdrop has already drawn millions of users across multiple chains. Partnerships around Midnight are designed to increase engagement and bring more capital to Cardano. Real Finance, or RealFi, will provide blockchain-based microloans to underbanked users globally.
Hoskinson mentioned the integration costs for these initiatives could reach $100 million. The Cardano Foundation has committed significant funds to support liquidity and wider adoption.
Bitcoin and XRP DeFi Opportunities
Hoskinson identified additional opportunities for Cardano TVL growth in Bitcoin and XRP DeFi. He stated Bitcoin DeFi could contribute up to $15 billion to Cardano’s TVL.
Additionally, Cardano operates on an enhanced UTXO model akin to Bitcoin’s which might ease DeFi integration. The platform is investigating ways to reach the Bitcoin’s $2 trillion market for decentralized apps.
According to Hoskinson, if Cardano network integrated XRP, Cardano’s total value locked could potentially reach $100 billion, making it a key player in cross-chain DeFi.
Network Stability and the Most Recent Fork
Recently, a malicious transaction took advantage of a software flaw and caused Cardano’s network to split. ADA’s operations on major exchanges like Coinbase were temporarily suspended as a result of the split.
The problem arose when the new nodes took in a transaction that had been rejected by the older ones leading to the divergence of the ledgers. The engineers at Cardano managed to roll out the patches within three hours, and the natural consensus was reestablished the next day.
The developer responsible for this admitted that he had done the testing without the necessary precautions. The authorities were alerted, and a lawyer engineer from Input Output Global decided to leave the company due to concerns about legal matters. During the split, some DeFi applications reported varying transaction data, and the ADA price dropped and then partially recovered.
Cardano is still dealing with the issue of providing security to the network while it is also in the process of implementing its DeFi strategy. Hoskinson’s vision for the ecosystem’s TVL is coming to fruition as he keeps on introducing new, highly beneficial projects such as Midnight, RealFi, and Bitcoin and XRP integration.
