Cardano (ADA): Update on February 4 should increase network capacit

Cardano (ADA) has announced a minor update for tomorrow, Friday, which should increase the network capacity. This seems to be necessary because Cardano recently experienced overloads.

Cardano (ADA) is reacting to the challenges that have arisen from the first DeFi projects. Since the first ambitious decentralized crypto exchange (DEX) under Cardano was launched in January with SundaeSwap, ADA’s network has been groaning under the strain. For users of SundaeSwap, the massive increase in transactions meant that orders were only processed with delays that sometimes lasted for days. InputOutput, the crypto company behind Cardano, now promises relief through a technological update.

Via Twitter, Input Output announced that two improvements will go live on Friday evening. First, the block size will be increased from 72 KB to 80 KB, which means that a new block on Cardano can contain around 11 percent more transactions in the future. In parallel, the size of the data packets containing smart contracts will also be increased. Both measures should have a direct positive impact on network capacity for the ADA ecosystem. InputOutput describes the measures as part of a series of planned optimization steps Cardano is taking to meet growing demands.

Meanwhile, data from DefiLlama shows that while DEX SundaeSwap was able to attract just over $80 million in capital at launch, it has since started to lose traction. SundaeSwap accounts for more than 90 percent of DeFi’s current volume under Cardano. With currently around 70 million invested capital for DeFi under Cardano, the ecosystem is a flyweight compared to well-known competitors such as Solana (SOL) or Fantom (FTM), as our current market overview also reveals.

Conclusion: ADA and DeFi – absolutely no dream couple

Hundreds of exciting projects had been promised by Cardano founder Charles Hoskinson for the time after the upgrade Alonzo and the associated introduction of smart contracts. Investors here were especially expecting the money-losing DeFi growth division. Five months after Alonzo, however, the first larger DeFi project, SundaeSwap, has already brought Cardano’s network to its knees. The small technological updates now coming into effect will predictably not be able to resolve this dilemma, because they do not bring any additional reserves, but at best alleviate the misery. Accordingly, the market is reacting skeptically, allowing ADA to continue to swing sideways at levels around $1. Before and shortly after Alonzo, Cardano was still trading at over 2 US dollars.

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