Bringing DeFi to Cardano
The Venus team emphasized that Cardano “has rapidly accelerated to being part of the top four cryptocurrencies by market cap.” Currently, the figure is approaching $26 billion, according to data aggregator CoinMarketCap.
On Feb. 5, ADA reached a three-year high of $1.40. Meanwhile, its trading volume has nearly doubled since the announcement.
On Feb. 3, Cardano successfully implemented its Mary hard fork, an update that intends to turn the network into a favorable environment for various Decentralized Finance (DeFi) projects. As the Cardano Foundation’s Elliot Hill highlighted in a blog post, this will significantly boost decentralized applications (DApps) and native tokens, among other things.
As soon as Cardano’s Goguen Era begins, the team also plans to launch its own lending and liquidity provision protocol. Liqwid Finance, the first-ever DApp to be built on the Cardano blockchain, was initially introduced in October 2020. However, the liquidity bootstrapping program is only about to start, following the final Goguen upgrade.
Real DeFi Adoption Is Yet to Come
In the context of these delays, Venus Protocol may serve as the most viable DeFi market entry for ADA holders. Since its initial release in September 2020, the platform has notably grown. It has over 18,000 users and roughly $2 billion of total value locked (TVL) in the protocol.
Apart from ADA and the world’s leading cryptocurrencies, the Venus platform also provides access to assets that benefited much from the recent surge in DeFi’s popularity. This includes Binance’s BNB, Ripple’s XRP, Chainlink’s LINK, and Polkadot’s DOT, along with various stablecoins.
Having the highest 24-hour volume of all DEXs listed on CoinMarketCap, Venus will roll out high-frequency trading and market maker incentives.
The concept of DeFi on Cardano is quite promising in theory. But the sticking point is that it’s still in the early stages of development. The main question is whether Cardano will outperform Ethereum (ETH) and Polkadot as a platform for DeFi protocols.