Occasionally, Cardano FUD appears and people ask if this project deserves to have such a high capitalization and be in the top 10. I believe that blockchain projects are not here to fight among themselves for a higher market capitalization, but to provide utility to people. What is useful is decided by each individual according to their needs. Is the second largest social network less useful or less relevant than the one in the first place? It would be very foolish to claim this. Technology development is not a sport, so there is no need to compare success by rank. Blockchain development does not have a fixed goal but is a continuous process. The same can be said for the adoption of cryptocurrencies and the use of blockchain in the financial and other sectors. The ranking will constantly change and that's okay. So is ranking a completely irrelevant metric? You can't say that. So what does market capitalization ranking suggest? TLDR The ranking is a reflection of many different factors and subjective reasons of those who hold the coins of blockchain projects. The adoption of blockchain is still at the beginning and everything can change quite fundamentally depending on many external events. Almost nothing can be predicted with a high degree of certainty. Still, we can conclude that Cardano deserves to be in the top 10 and there are many relevant reasons for that. The main reasons are liquid staking, decentralization, community, and the Plutus platform. Many factors determine the ranking Many factors determine the ranking by market capitalization. There is no particular characteristic or strength that automatically guarantees a good ranking for a blockchain project. The ranking may reflect the age of the project, the network effect, the quality of the technology, the mission of the project, the team and its ability to continue to innovate, the changing mood of the society, regulation, the ability to solve specific problems, the effectiveness of the technology, specific benefits to the token holder, and many other factors. Every single thing can change over time. The oldest project, Bitcoin, has the advantage of having been around the longest. Bitcoin has the first mover advantage, but this can turn into a disadvantage as teams of new projects tend to innovate faster. The network effect of relevant blockchains, including Cardano, is growing very fast. Newer projects have more efficient network consensus, offer more utility, and will scale better at layer one. People, including us, like to look at various statistics and metrics. They try to estimate the future of projects based on them. But this is very tricky, as a few events or technological advances can change this completely in a relatively short period of time. Take Elon Musk's efforts to get humans to Mars. Many people see it as the future of humanity while others don't believe it at all. Only the experts have a chance to guess whether our generation will live to see it, but even they could be wrong. There are specific technological obstacles to this mission, and no one can predict when and how they will be resolved. Is it possible that there will be someone else who can get to Mars faster than Elon? It doesn't look like it yet, but it can't be ruled out. The blockchain industry is similar in many ways. No one can predict exactly what we will use blockchain for. Some believe we will only be hodling BTC at HW wallets while others predict the disruption of many industries as soon as the finance sector is disrupted. Will the financial sector be disrupted? Which project will succeed and why? What innovations, regulations, and incentives will we need to achieve that? No one knows. The fate of cryptocurrencies is thus somewhat similar to the mission to Mars. We all believe that blockchain technology is here to stay, but we can speculate endlessly about the details of real-world use and adoption rates. The ranking of projects will change based on which projects will be used the most and which will be the most useful (scalable, reliable, more efficient, faster, safer, more flexible, etc.) in future adoption waves. Why is Cardano in the top 10? It is impossible to give a clear answer as to why a particular project is in a particular place in the ranking, just as it is impossible to predict the future. Actually, it is not even possible to say why Bitcoin is first. There are historical reasons for that, but whether it will stay that way is something people are already arguing about. Quite unnecessarily. The needs of the market will decide. If we were to look for specific, rather subjective answers, we could say that Cardano deserves to be in the top 10 for the following reasons. Cardano has been in the top 10 since 2017. Some people claim that the projects in the top 10 are constantly being changed, but the reality is that some projects have been there almost from the beginning of their launch. In fact, that's true for many of them. In addition to Bitcoin, this can be said for Ethereum, Ripple, Binance Coin, and Cardano. Cardano has been in people's consciousness for more than 5 years. It is said that the longer a project exists, the less chance it has of disappearing. The Lindy effect is a theory that suggests that the future life expectancy of a non-perishable item or idea is proportional to its current age. In other words, the longer something has been around, the longer it is expected to continue to exist. Don't expect Cardano to disappear from the world in a year. There's a huge chance it will be around for at least another 5 years or a decade. Staking is a strong economic incentive to hold ADA coins. Cryptocurrencies are created mainly to build decentralized finance. To do this, blockchains must retain their decentralization. Cardano is one of the most decentralized networks. This is due to the well-designed staking, which is economically accessible to almost everyone on the planet and very easy to get involved in a non-custodial way. Cardano had PoS 2 years earlier than Ethereum and thanks to liquid staking it is still the standard in this area. Isn't that in itself a good reason to be in the top 10? No DeFi app in the Cardano ecosystem has been hacked yet. Of course, this metric needs to be seen in the context of the number of apps, the number of users, and the TVL. However, the reality is that the first DEXes on Cardano are celebrating their first anniversary and there hasn't been a major hack yet. One day it will happen for sure. However, it will be important to keep the number of hacks low compared to other platforms. If this were to be the case, it would be another reason for a high market capitalization. The world of finance requires high resilience against hacks in the first place and the platform that can best ensure this will surely become the backbone of the new financial world. Cardano certainly has a chance to aspire to that status. It is said that Plutus/Haskell is too hard to learn and that is why it is difficult to write applications for Cardano. EVM chains have a clear advantage. Isn't the disadvantage that all EVM chains are mostly similar to Ethereum and the rate of innovation is lower? It's relatively easy to build a new EVM chain and allows third-party developers to quickly create new DEXes, lending protocols, stablecoins, and other things. The problem is that these applications are often just copies of what already exists on Ethereum. From our point of view, it is an advantage that Cardano uses UTXO model and Plutus because it is different from EVM and can offer different characteristics no matter if better or worse. Time and the market will decide what technologies will be adopted. Cardano is not here to compete with EVM platforms but to create a reliable and secure foundation for the creation of an alternative financial world. Other platforms are trying to do something similar. Diversity is certainly an advantage from an outside observer's perspective. EVM may win out, of course, but the very fact that Cardano is being built from the ground up in a completely different way than competing chains gives it a definite advantage. To be successful, it is not necessary to have thousands of deployed applications per year but to have several applications that attract a large number of users. Haskell is popular in banking because banks place a high priority on security. Why shouldn't emerging banks be able to use similar standards they are already used to? I am not of the opinion that every team of juniors should be able to quickly build a financial application. Many hacks are caused by the low quality of smart contracts, the low experience of the authors, and the desire to quickly deliver the application to the market, regardless of the fact that it is only a beta version. The Plutus platform offers the possibility to create a reliable financial application and to be able to formally verify its reliability. It can be stated that Cardano is not currently the leader in various DeFi metrics, but that is logical considering when the Plutus platform was released. If something is being compared, context and consideration for future development are important. Developers will soon have other programming languages to write smart contracts for Cardano. In a year or two, the statistics may look very different. If Plutus is difficult for third-party developers, they can have a look at Marlowe, Aiken, Eopsin, Helios, and others. It could be said that the ranking of projects is largely influenced by how people believe in them. People vote by holding the coins of individual projects. It can be argued that each project deserves its position. This applies to the present, but also to the future. If any project achieves significant innovation or somehow becomes more visible, it can move up in the ranking. It's only fair. We can talk about a project being undervalued or overvalued, but it is always the result of many factors. People's belief in the positive future of the project is a good argument for the ranking. People's beliefs can be manipulated, of course, and the influence of the media who cheer for specific (VC) projects is significant. In the long run, the fate of projects will be decided mainly by single holders. VC funds can temporarily pump up the market capitalization of projects or inflate the TVL, but if a project can't retain users, it will fail. VC funds tend to take profits and thus can cause huge economic losses to retail users. Cardano is not a pump/dump project as VC funds were not involved in the initial coin distribution. At this time, buying ADA may not seem profitable for them. If they do decide to enter the Cardano ecosystem, it will have to be for a longer period of time and thus they will become long-term hodlers similar to the older projects. People have confidence in Cardano and its future. The IOG team regularly innovates the protocol. All metrics are growing. The initial distribution of ADA coins was fair. The project is being gradually prepared to transition to on-chain governance. New academic studies are regularly published by the team. Cardano has the potential to be one of the projects that can handle the blockchain trilemma at the first layer. We could talk about native tokens, Hydra, the algorithmic over-collateralized stablecoin Djed, about the multichain wallet Lace which has the potential to onboard millions of users into the Cardano ecosystem. Last but not least, we must mention the huge Cardano community. It may seem that the size, quality, and strength of the communities are a reflection of the rankings, but this is not necessarily the case. Just because a community is large does not necessarily mean that it is committed, united, and objective. Communities can be toxic, frontline influencers can be unpopular. No community is perfect, and this is true in Cardano's case as well. However, we can state that the Cardano community is visible and active. Isn't this also the reason for the high capitalization? It certainly is, as it is a reflection of the current adoption rate and this can be a driver for further growth. The number of holders is important to the success of a cryptocurrency, and ADA definitely ranks in the top 10 in this metric as well. Technology without users is essentially dead. Unless the blockchain has a community, adoption from the bottom up is impossible. It needs to be supported in other ways, perhaps through an existing company with a large user base. The question is what the degree of decentralization can be if the blockchain does not have a community. A blockchain without a community may end up as a corporate project. Millions of people may use such a blockchain, but is it a good basis for creating an independent and decentralized financial system? Conclusion There are thousands of projects, but only a handful of them are relevant in terms of technology development, community, and potential. Cardano is said to be the tortoise who outruns the hare in the famous fable. The IOG team has several hundred members and growing. Cardano is evolving in the fastest way possible when you consider the quality of development and the emphasis on formal methods. Cardano may appear to be a tortoise in the context of EVM clones, but it's actually a fast-moving hare. From our perspective, Cardano deserves to be in the top 10 if we take various factors into account. We even think it should be in the top 3, but this is just our subjective opinion based on the assumption that decentralization and security should be the most important things influencing the ranking. But no one knows what factor will ultimately be the deciding factor and it is more likely to be network effect and utility. For cryptocurrency adoption, it would be healthy to stop seeing individual projects as competitors at the starting line, but rather as services to be used as needed. Competition is healthy for innovation, but it should take place between teams, not communities. People should choose DeFi services in the same way as they choose, say, social networks or financial products. You can start with staking ADA to see for yourself how easy and affordable it is to participate in the decentralization of the blockchain network and get a regular reward for it. Gradually you can start trying out DeFi applications. This is the best way to get an objective opinion of Cardano. Cardano FUD has been around since 2017, but thankfully it's gradually fading and sounding more and more silly. Cardano is growing and cannot be stopped through FUD which is often completely unfounded, based on ignorance of the project or misunderstanding of cryptocurrency principles in general. Cardano will very likely be here for another 10 years and continue to grow in important metrics.
