Cardano, the blockchain platform aiming to create a more sustainable and secure digital ecosystem, has achieved a significant milestone with the first phase of its Chang hard fork. This upgrade, designed to introduce decentralized governance, is a crucial step in the platform’s evolution. However, while the technical advancements are promising, the price of its native token, ADA, continues to struggle.
The Chang hard fork is being rolled out in two phases. The first, which has now been initiated, establishes the groundwork for ADA holders to participate in governance decisions. A key metric for the success of this phase is the readiness of stake pool operators (SPOs) and exchanges to adopt the new node version. Cardano has already surpassed the target of 70% SPO adoption, with over 74% of blocks now created on Chang-ready nodes.
While the progress on the SPO front is encouraging, exchange liquidity remains a hurdle. Only a fraction of exchanges have integrated the necessary updates to support the Chang hard fork. This could potentially impact the overall adoption of the new governance model.
Despite the technical strides, the price of ADA has been on a downward trajectory since March. The token has lost nearly 50% of its value, and it’s currently trading significantly below its all-time high. While some analysts point to the broader cryptocurrency market downturn as a primary factor, others believe that Cardano’s price performance is also influenced by factors such as user growth and network activity.
Data from IntoTheBlock reveals that Cardano’s user base has remained relatively stagnant over the past year. While the network’s transaction volume has shown some stability, it hasn’t experienced the explosive growth seen on other platforms. This lack of user engagement might be contributing to the subdued price action.
However, Cardano’s low Network Value to Transactions (NVT) ratio suggests that the token might be undervalued compared to its on-chain activity. This metric indicates that ADA’s price might not accurately reflect the network’s underlying value.
As Cardano moves forward with the second phase of the Chang hard fork, the community will be watching closely to see if the new governance features can stimulate growth and attract new users. Ultimately, the success of the platform will depend on its ability to deliver real-world applications and demonstrate tangible benefits to its users.
While the technical advancements represented by the Chang upgrade are undoubtedly positive, Cardano still faces challenges in terms of price performance and user adoption. The coming months will be crucial in determining whether the platform can overcome these hurdles and realize its full potential.