When a bear market arrives, the blockchains that continue to innovate and develop are the ones that will be best positioned for further success when a bull market returns.
No one can know when the next bull market will arrive, but to ensure that you are prepared, it is best to build positions in cryptocurrencies that make development a priority.
Cardano (ADA -1.41%) is one cryptocurrency that has used 2022 to prove that it will continue to innovate -- even in a bear market.
A solid 2022 so far
Cardano has had a couple of important milestones in the last year.
The first came in the fall of 2021 when the blockchain officially became smart contract-compatible. Smart contracts are the backbone of any DeFi ecosystem. Without them, developers cannot build things like decentralized exchanges, staking platforms, NFT exchanges, and many other applications. All of these use cases bring more money to blockchains, which helps them become more valuable over time.
With the arrival of smart contracts, Cardano took the first and most important step in attracting new growth. Since late 2021, nearly 3,000 smart contracts have been added to Cardano. Most of that growth has occurred in 2022. The number of smart contracts on the network has almost doubled since late March.
This increased growth has added new value to the blockchain. To measure the increased value, we can look at a statistic known as total value locked (TVL), which serves a similar purpose as a market cap but is best used for quantifying the value of a DeFi ecosystem.
Since the beginning of 2022, Cardano's TVL has seen explosive growth. In January, Cardano's TVL was just under $1 million. It skyrocketed to more than $325 million by March.
It gets better
Even though Cardano's TVL has taken a hit in recent months with the widespread crypto downturn, more exciting news has come out recently.
To ensure that Cardano is prepared for an increase in traffic, it's getting an upgrade.
Known as the Vasil hard fork, this upgrade should speed up transactions and lower fees. Some other upgrades will streamline smart contract functionality and allow developers to build applications faster.
These updates will allow Cardano to become more flexible without sacrificing speed or increasing fees. In blockchains, this is known as scalability.
Prioritizing scalability is essential to growing a blockchain. And when a blockchain supports more applications and utilities, it becomes more valuable.
There is no way of knowing when the so-called crypto winter will come to an end, but for Cardano to continue developing despite the downturn deserves recognition. As the crypto winter drags on, cryptocurrencies that struggle to attract new users will ultimately die out. However, the ones that keep innovating will have an advantage when the next bull market returns.
Cardano's DeFi ecosystem is likely just in its infancy. Despite my Cardano shares being down, I am still holding because I believe in the blockchain's potential. The introduction of smart contracts and the release of the Vasil hard fork are major accomplishments that will likely attract more developers and hopefully higher prices in the future.