Cardano is undergoing an important stress test

Published 12.6.2023

The SEC has sued the Binance and Coinbase exchanges and designated many cryptocurrencies, including ADA, as securities. This caused panic in the market. The market value of ADA fell by 30%. The Cardano protocol and the DeFi ecosystem went through an important stress test. Cardano handled the high load of transactions well and there were no technical problems. The DeFi ecosystem worked as expected and we have not noticed any troubles. The algorithmic overcollateralized stablecoin DJED maintained its peg to the USD. The Cardano community, including IOG, has expressed opposition to the SEC's claims. Reputable lawyers have expressed the opinion that the SEC's claims are very weak. After the media armageddon, everything is back to normal. The number of new wallets and stakers is growing. DeFi has seen a dramatic drop in TVL, but at the time of writing, we see new ATH at 522M locked ADA coins. We dare say that in the eyes of many people, Cardano is now stronger than before and the technology will gain the trust of new users. We will show through several examples that the SEC has not been able to stop the growth of the Cardano ecosystem and that users continue to trust the project.


Cardano frequently trends on social media, is among the top 10 in terms of most used networks, currently has the fourth highest DEX volume, and has reached a new ATH in the TVL. The number of new wallets is growing by an average of 2,800 per day and the number of stakers by 250 per day.

Cardano as a winner of media attention

It was surprising that the SEC's lawsuit was exploited by many media outlets to write about how this will be the end for Cardano because the ADA is security. Some articles even ignored other projects mentioned in the lawsuit. Some centralized exchanges began to delist ADA and other projects in panic and fear.

At the same time, the Cardano community was expressing huge disapproval of the SEC's statement. Interest in Cardano and his future fate has been at the center of media and social networks' attention. As negative as the event may have been, it allowed the community to show its size, strength, and determination to continue its activity in the Cardano ecosystem.

Look at how Cardano and ADA were discussed on Twitter on Saturday, June 10, for example. A total of 4.7M tweets. In the case of Bitcoin, it was 2.8M tweets despite the fact that the second largest Bitcoin conference was held in Prague.

It is important to note that this is not an exceptional situation and Cardano is trending very often. For example, at the time of writing, we can see 2.4M tweets about ADA, 2.6M about Bitcoin, and 6.4k about Ethereum.

Cardano is not just a technology, but a new social construct. The community is what protects the protocol. If the SEC or anyone else does what we the Cardano community do not like, they will feel its resistance. The SEC is not attacking the 3 founding entities or the protocol, but mainly all people who are willing to show their willingness to continue to support Cardano and express their disagreement with the decisions of the state authorities.

Cardano is an unstoppable network because it is one of the most decentralized in the top 10. The SEC can't confiscate ADA coins from 1.3M people worldwide, so it has no chance of shutting down Cardano. However, the high decentralization of the network is not the only layer of protection. The Cardano community is perhaps an even more important part of the Cardano project. Reputable lawyers have opined that the SEC's ADA claim is very weak.

If you go on Twitter or any other social network today with the intention of learning about cryptocurrencies, chances are you won't miss Cardano. Everyone in the world has heard and knows something about Bitcoin. It's very likely that the same is true of Ethereum today. Cardano is gradually building a similar position, and all the news, even the negative ones, helps spread awareness about the project.

Cardano and the DeFi ecosystem

Cardano surpassed the 100,000 active addresses mark over the weekend, making it the fifth most-used blockchain after Tron, Bitcoin, Ethereum, and Litecoin. The Cardano protocol handled the increased number of transactions excellently and there were no consensus-level issues. The usage of the block did not exceed 80% in the peak period and is now somewhere around 40%.

This was a significant stress test as the drop in the market value of ADA coins caused increased user activity. In the past, we have seen similar SC platforms with full mem-pools, extremely expensive transaction fees, and desperate users wanting to send a transaction quickly as they were threatened with margin calls.

We were most pleased with the algorithmic overcollateralized stablecoin Djed, which held the peg to the USD. A dramatic drop in the market value of the collateral may cause problems as the collateral of the stablecoin may be lost. Djed behaved exactly as expected.

It is currently not possible to mint new DJED coins as the reserve has fallen below the reserve ratio. Similarly, it is not possible to burn SHEN. DJED holders can get back the appropriate number of ADA coins equivalent to 1 USD. On the chart, you can see that the historical high of the DJED was 1.09 and the low was 0.96 USD.

Total Value Lock (TVL) started to decline after the announcement of the lawsuits and reached 472M ADA coins. The Cardano ecosystem reached a new ATH and surpassed 522M ADA coins.

Cardano currently has the fourth-highest DEX volume behind Ethereum, BSC, and Arbitrum. Over the last week, we can observe a 70% growth.

The number of wallets and stakers continues to grow. In the last week, the number of wallets has increased by about 20,500 and the number of stakers by 1,700. That's roughly 250 new stakers every day, roughly in line with the long-term average.

Many teams and individuals have publicly declared that they are continuing to work and do not intend to change anything because of the SEC lawsuits. This is extremely important because as we have said, Cardano is mainly about people. Not just about the users, but also about the people who build projects on Cardano or are active in some other way. 50M ADA is allocated in Catalyst Fund10 for new projects. This will be another strong impetus for growth.


It's not at all important what the SEC thinks of Cardano, but what the users think. If I didn't follow social media, I wouldn't have noticed anything important happening besides a short-term TVL reduction. We're on a new ATH now, so I guess I would have thought it was just some kind of correction. All the important stats are rising exactly the same as a week ago. However, the lawsuit against the US exchanges is a real thing and has caused panic in the market. Despite this, Cardano continues to produce blocks, people can send transactions and use DeFi. No one can stop people from using Cardano. The network is available wherever there is the internet. People don't care about the SEC's opinions and the number of users rises every day. This is the most positive news. The power of the SEC ends where decentralization begins. So somewhere on the border of centralized exchanges. The accused exchanges will defend themselves, and there's a good chance they'll win in court.

The market value of ADA coins, in the long run, will be influenced mainly by the network effect, technology development, and real use cases. The SEC lawsuit may be one of the more significant events in the blockchain industry, yet it will not have a major impact on Cardano in the longer term. From the point of view of users, this is already a minor event.


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