Will Cardano’s DeFi growth be enough for ADA’s price?

  • Cardano’s TVL grew as DEX volumes on the network surged.
  • Interest in Cardano’s NFT sector declined.

Cardano [ADA] recently witnessed positive growth in the DeFi sector.

Recent data indicated that Cardano’s Total Value Locked (TVL) exceeded 695 million ADA, signifying a substantial amount of assets currently secured within the Cardano ecosystem.

Growth in the DeFi space

The increase in TVL was reflective of the community’s engagement and the platform’s evolving ecosystem. A large part of this rise could be attributed to the popularity of DEXes and dApps on the Cardano network.

One of the most popular DEXes on the Cardano network, MuesliSwap, saw a 68.92% hike in terms of unique active users on the network over the last week.

The volume on the DEX grew by 83.24% and reached a total of 1.61 million during the same period.

Source: DappRadar

Some problems in the NFT space

Even though there was growth seen in Cardano’s DeFi sector, the same couldn’t be said about the NFT vertical.

AMBCrypto’s analysis of CryptoSlam’s data showed that the overall sales volume of Cardano NFTs had declined by 29.87% in the last week. The number of unique buyers and sellers had also declined.

Screenshot 2024 01 29 at 1.35.33 PM

Source: CryptoSlam

A diminished NFT market could lead to a loss of interest from potential investors and users, impacting the overall vibrancy and attractiveness of the Cardano network.

ADA sees red

At press time, ADA was trading at $0.487 and its price had declined by 1.01% in the last 24 hours.  The velocity at which it was trading had also declined, sitting at 26,222 at press time.

Cardano ADA 13.48.45 29 Jan 2024

Source: Santiment

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Sentiment around the ADA token can also be impacted due to its utility as a governance token. Most users feel that ADA is the best option for a governance token, as compared to an altcoin like Polkadot [DOT].

Such comparisons also work to impact sentiment around ADA negatively.

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