Cardano price has doubled since the start of 2021, and the move coincides with a new all-time high in Cardano-related Twitter mentions.
Social media mentions about Cardano have been growing since the beginning of the year, and during this time, the price of its ADA token has more than doubled, in the process surpassing Bitcoin Cash (BCH) to become the sixth-largest cryptocurrency by market capitalization.
A deeper dive into data from Twitter data failed to identify a specific driver of ADA’s bullish price action, but data from The Tie did show that Cardano mentions recently reached an all-time high, with the price tracking the increase.
Keyword analysis of Cardano-related tweets also failed to identify the motivating factor behind the recent social media surge but terms like “pool,” “stake” and “staking pools” were the most frequent trigger words in the majority of discussions led by community members.
In private comments with Cointelegraph, Joshua Frank, founder of The Tie, said that chatter regarding an “interoperability bridge between Cardano and IOTA” that began making the rounds on Jan. 2 seems to have corresponded with the upward price movement and a relatively large increase in tweets.
This is referring to a recent discussion on Iota’s discord in which project co-founder Dominik Schiener was asked if the Iota Foundation was interested in developing a “bridge to Cardano.” In response, Schiener stated, “Yeh 100%. Once we’re ready I’ll reach out to Charles again.”
According to Frank:
“24 hours after the idea started being discussed Cardano saw a 63% increase in tweet volume and price surged 27% vs. USD and 25% vs. BTC, suggesting that this was an uncorrelated move.”
Development enters the Gougen phase
Cardano’s roadmap indicates that the project recently transitioned from the Shelly era to the Goguen era.
The Shelly era brought decentralization to the core of the network and enabled ADA holders to stake and delegate their tokens to earn rewards.
Now that the project has entered the Goguen era, the focus of development is on the integration of smart contracts and the ability to build decentralized applications, or DApps, on the network.
The addition of smart contracts and DApps opens a whole new realm of functionalities for the Cardano network, including the ability to create decentralized finance applications.
In a recent conversation with Cointelegraph, Cardano founder Charles Hoskinson opined on the future of DeFi and how the team plans to “take the lead in the DeFi space by developing partnerships in the African continent.”
According to Hoskinson, the real potential of DeFi will be realized in developing countries where he sees the potential to acquire 100 million new users within the next three years.
Hoskinson said Cardano was:
“Built for the purpose of creating liquidity for the poorest people in the world and allow them to build wealth and protect the wealth that they’ve acquired.”
Staking backs ADA’s rally
On Jan. 1, prior to any well-known mentions of a bridge between Cardano and Iota, ADA was trading at $0.173, with a 24-hour trading volume of $1 billion.
Over the past two weeks the price and volume increased by more than 200%, with the current daily trading volume averaging $3 billion and ADA trading near $0.358.
One possible source of the upward price pressure is a decrease in the circulating supply due to a large number of ADA holders staking on the network.
Data from Staking Rewards indicates that 70% of ADA’s total supply (21.84 billion ADA) is being staked on the network. Investors who stake earn 4.28% APY for each epoch (5 days), and payouts are automatically distributed at the protocol level.
There are currently 1,468 active validators on the network serving 140,130 total delegators, with the largest validation pool holding 1.77% of the total ADA supply being delegated by 851 unique wallet addresses.
A continued uptrend in the staking participation rate over the past month, as seen in the chart above, has the potential to lead to further price appreciation as the number of ADA available for trading slowly dwindles.
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