Cardano DeFi activity has blossomed despite the SEC designating ADA as a security, but that has not stopped many users from dumping their holdings.
The total value of assets locked (TVL) on Cardano has reached a record high of 578 million ADA, according to data from DeFiLlama.
Cardano DeFi Activities Thrive
Since the beginning of the year, decentralized finance activity on Cardano has increased exponentially, with more traders utilizing decentralized applications built on the blockchain.
Evidence of Cardano’s thriving DeFi sector is reflected in the growth of its top 10 protocols. According to DeFillama data, these protocols recorded double digits growth over the past month.
Additionally, Cardano has recorded more than 1000 Plutus V1 smart contracts in 2023 — another indication of the increased activity on the blockchain network.
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ADA Holders Selling at a Loss as Price Struggles
Blockchain analytical firm Santiment pointed out that a significant amount of ADA was sold at a loss over the past week after investors profited. The firm noted that ADA mainly saw high sales at lower prices.
IntoTheBlock data further shows that nearly 90% of ADA holders are doing so at a loss.
While there might be several reasons for traders to sell at lower prices, the SEC’s decision to label ADA as a security in June might have influenced some traders. Although the Cardano Foundation has disputed this classification, it is clear that the labeling impacted market sentiments surrounding the asset.
However, the SEC labeling merely compounds ADA woes. The cryptocurrency’s price has been struggling for several months, reaching a 2-year low of $0.23 after the authorities labeled it a security.
This explains why Cardano’s TVL in dollars has remained below $200 million since peaking at $326 million in March 2022, despite the ongoing increase in ADA locked within the ecosystem.
Meanwhile, ADA is trading at $0.286 after increasing by 2.6% in the past 24 hours, according to BeInCrypto data. However, its value is down by roughly 40% over the past year.
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