Cardano Begins the Second Half of Its Journey: How Will the "Elephant in the Room" Build Its Own Era of Smart Contracts?
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Cardano Begins the Second Half of Its Journey: How Will the "Elephant in the Room" Build Its Own Era of Smart Contracts?
Cardano embarks on the second half of its journey: how will the "elephant in the room" build its own era of smart contracts?
Navigating Web3 tides with focused insightsOnce regarded as a strong contender to Ethereum, the veteran blockchain project Cardano has weathered multiple market cycles in the crypto industry and has long been the "elephant in the room" — highly visible yet often under-discussed:
Even as most crypto projects suffer from prolonged bearishness in secondary markets, Cardano’s total market cap remains as high as $19 billion (as of CoinGecko data on August 16), ranking 6th overall and 3rd among non-stablecoin assets, behind only Bitcoin and Ethereum, and ahead of BNB.
Now, with Cardano having entered the smart contract era since September last year, its ambitious goal of becoming a smart contract platform finally seems within reach. As infrastructure matures, will Cardano attract renewed capital inflows? Could it develop new narratives and unlock fresh valuation potential?
Veteran Blockchain Cardano: The Elephant in the Room
Cardano is an open-source PoS public blockchain based on the Ouroboros Praos consensus protocol, employing a two-layer "dual-chain" architecture: a settlement layer for handling simple transfers and staking, and a computation layer dedicated to smart contract interactions.
It uses a modified version of UTXO (EUTXO) to support smart contracts and is currently under steady development.
On the project development side, three main official entities drive Cardano forward: the Cardano Foundation, EMURGO (a commercial incubator), and IOHK (the technical development company). These organizations operate with a design akin to “separation of powers,” working collaboratively toward advancing Cardano's development, adoption, and ecosystem growth:
The Foundation oversees the development of Cardano and its community; IOHK leads core development; while EMURGO (alongside Adaverse, Cardano’s global incubator) focuses on incubating and investing in ecosystem projects.
As of August 16, data from Staking Rewards shows that in terms of staked value, Cardano ranks third globally—behind only Ethereum and Solana—making it the third-largest staking network in the crypto world.
Additionally, according to ADApools, as of this writing, the Cardano network hosts 3,178 stake pools, over 1.16 million delegators, and a total staked amount of 24.68 billion ADA—over 70% of ADA’s circulating supply.
Moreover, since entering the smart contract phase in September last year, grassroots evolution within the Cardano ecosystem has become increasingly evident, with growing diversity across sectors including DEXs, lending, derivatives, fixed income, algorithmic stablecoins, asset synthetics, aggregators, and more.
The clearest evidence lies in the gradual rise of its DeFi total value locked (TVL), growing from zero to approximately $110 million today, marking the initial formation of its own native ecosystem.
Meanwhile, beyond EMURGO, Adaverse—the newly established global incubator officially backed by Cardano—has also been deeply committed to cultivating the Cardano ecosystem. Leveraging privileged access to official resources and funding, Adaverse has already incubated dozens of high-quality projects across multiple verticals, forming an early but promising Cardano ecosystem matrix.
Cardano Development Roadmap
According to its roadmap, Cardano’s development is divided into five major phases: Byron (Foundation), Shelley (Decentralization), Goguen (Smart Contracts), Basho (Scaling), and Voltaire (Governance).
Currently, Cardano is in the fourth phase—BASHO (Scaling)—meaning scaling solutions are now the primary focus of development.
BYRON (Foundation)
Launched in September 2017, BYRON was Cardano’s first version, enabling users to transact ADA on a blockchain running the Ouroboros consensus protocol.
Additionally, during this phase, IOHK launched its official desktop wallet Daedalus, and EMURGO introduced Yoroi, a lightweight wallet designed for fast transactions and everyday use.
The launch of the mainnet laid the initial foundation for the Cardano community.
SHELLEY (Decentralization)
Following the Byron era, the SHELLEY phase marked a period of network growth and decentralization. Unlike Byron, which began at a single point with the mainnet launch, the transition to SHELLEY was designed to be smooth and low-risk, avoiding service disruptions.
During SHELLEY, increasing numbers of nodes were operated by members of the Cardano community, enhancing the network’s decentralization, security, and robustness.
SHELLEY also introduced delegation and incentive programs—reward systems aimed at promoting stake pool participation and broader community adoption—allowing users to stake their ADA to help secure the network, significantly reducing operational costs.
This phase dramatically increased community engagement while strengthening the network’s security and resilience.
GOGUEN (Smart Contracts)
With the integration of smart contracts, the GOGUEN phase represented a significant leap forward in Cardano’s capabilities, expanding its ability to support a DApp ecosystem.
Work on GOGUEN progressed in parallel with SHELLEY, helping both developers and non-technical users create and execute functional smart contracts on the Cardano network.
Plutus, in particular, was a breakthrough—a smart contract development language and execution platform built using the functional programming language Haskell—which improves consistency and usability compared to existing smart contract implementations.
GOGUEN signifies a profound shift in Cardano’s capabilities, opening the door to enterprise-grade, decentralized smart contract applications and laying the groundwork for future progress in the BASHO and VOLTAIRE phases.
BASHO (Scaling)
The current BASHO phase is focused on optimization, aiming to improve network scalability and interoperability. While previous eras emphasized decentralization and new features, BASHO prioritizes enhancing Cardano’s underlying performance to better support high-volume applications.
One of BASHO’s key developments will be the introduction of sidechains—new blockchains interoperable with Cardano’s mainchain, offering substantial potential for network expansion.
VOLTAIRE (Governance)
In Cardano’s design, the Voltaire phase aims to introduce on-chain governance, centered around voting mechanisms and funding allocation. In the future, Cardano will integrate a treasury system and decentralized voting software.
Currently, the IOHK team is developing several components:
- Cardano Improvement Proposals (CIPs): A social coordination system used to formally describe technical standards, specifications, and processes, ensuring transparency in on-chain governance;
- Project Catalyst: A financial system combining proposal submission and voting. Through this mechanism, Cardano ensures sustainable funding for ongoing development—future funds could come from community votes allocating transaction fees or issuing new tokens to finance continued innovation.
Growing Momentum in the DApp Ecosystem
Since completing the GOGUEN phase and officially entering the smart contract era, Cardano has gradually formed an ecosystem dominated by DEXs and NFT projects. Applications in DeFi such as DEXs, launchpads, and stablecoins have also emerged.
Minswap is a DEX featuring various AMM liquidity pools, routing trades through the most efficient path, potentially evolving into a DEX aggregator, and also offering IDO functionality.
WingRiders is a decentralized trading ecosystem based on AMM, allowing users to exchange native Cardano tokens in a trustless manner without intermediaries or single points of failure. It also aims to serve as foundational infrastructure supporting other projects.
SundaeSwap is the first native AMM-based decentralized exchange and liquidity provision protocol on Cardano, utilizing an innovative Initial Stake Pool Offering (ISO) fundraising model inspired by Cardano’s staking mechanism.
Currently, these three DApps occupy the top three spots on Cardano’s TVL leaderboard, collectively holding over $100 million, essentially forming the backbone of Cardano’s entire DApp ecosystem.
Beyond these, there are also diverse early-stage projects in testing, such as Djed, an algorithmic stablecoin developed by COTI within the Cardano ecosystem. Djed uses smart contracts to maintain price stability and is intended for DeFi operations, aiming to become the ultimate currency for paying transaction fees across the Cardano network.
Other infrastructure and scaling solutions include Milkomeda, a Layer-2 protocol providing EVM functionality for non-EVM chains. Milkomeda enables users to transfer Bitcoin, Ethereum, USDC, USDT, and other assets from Ethereum onto Milkomeda C1 to use EVM-compatible dApps.
Overall, according to previously published ecosystem blueprints from the Cardano community, active deployments are underway across multiple sectors including lending, launchpads, oracles, stablecoins, wallets, gaming, and NFTs.
Cardano’s Second Half
According to DeFi Llama data as of August 16, 2022, the total value locked (TVL) in Ethereum’s DeFi ecosystem was approximately $38 billion.
Meanwhile, other blockchains and Layer-2 solutions such as BNB Chain (formerly Binance Smart Chain), Solana, Avalanche, and Arbitrum have attracted nearly $30 billion in capital, establishing themselves as significant players.
Great winds begin from still waters. Recently, alternative smart contract platforms outside Ethereum are increasingly seen as viable diversification options—and are likely to become critical blue-ocean opportunities in the next phase of industry development.
For users and developers alike, could Cardano—just beginning its smart contract journey—become the next blue-ocean blockchain?
Adaverse’s Global Ecosystem Incubation Support
Building a robust ecosystem is paramount for any blockchain. As mentioned earlier, Adaverse—the global incubation fund for Cardano—leverages exclusive resources and capital from EMURGO and the official Cardano team to focus on incubating and investing across all sectors of the Cardano ecosystem. To date, it has supported dozens of high-quality projects across multiple verticals, forming an early but meaningful Cardano ecosystem matrix.
Starting in 2021, Adaverse began targeting Africa, investing in 12 projects within the Cardano ecosystem, including Afriex, Cassava Network, Canza Finance, AfriBlocks, Seso Global, BetDemand, AfriGuild, Ejara, Momint, Afropolitan, ScaleX, CALEND, and Diagon Studios.
These projects span remittance and payments (Afriex), African real estate markets (Seso Global), sports betting (BetDemand), African freelance labor markets (AfriBlocks), and blockchain infrastructure (Cassava Network), further enriching Cardano’s ecosystem footprint in Africa.
In addition to financial investment, Adaverse supports portfolio companies with fundraising assistance, marketing, and other essential consulting services, offering full-cycle incubation—from pre-investment to post-investment—in areas including financing, marketing, advisory, and listing.
These projects span remittance and payments (Afriex), African real estate markets (Seso Global), sports betting (BetDemand), African freelance labor markets (AfriBlocks), and blockchain infrastructure (Cassava Network), further enriching Cardano’s ecosystem footprint in Africa.
Going forward, Adaverse plans to continue expanding in Africa while broadening its reach into Asia, aiming for truly global coverage to help Cardano incubate and discover high-potential ecosystem projects worldwide.
Adaverse strategically aligns investments with Cardano’s rapid development and upcoming major upgrades. For startups in the Cardano ecosystem, Adaverse offers integrated advantages and one-stop financing services unmatched by traditional incubators.
This means that beyond funding, Cardano startups can leverage Adaverse’s resources to quickly plug into the Cardano ecosystem matrix, achieving synergies between liquidity and DApp products.
Going forward, Adaverse plans to continue expanding in Africa while broadening its reach into Asia, aiming for truly global coverage to help Cardano incubate and discover high-potential ecosystem projects worldwide.
Balancing Security and Performance Through Layering
Cardano operates on the Ouroboros Praos consensus protocol—a chain-based PoS mechanism—with built-in fault tolerance. The network is considered secure as long as at least 51% of staked ADA is held by honest stake pools.
As noted earlier, the network currently includes 3,178 stake pools, with a staking rate exceeding 70%, indicating a high degree of decentralization.
Cardano’s ability to maintain decentralization while matching competitors in transaction speed and low fees stems from its “dual-chain” design:
By assigning the settlement layer to handle simple transfers and staking, and the computation layer to manage smart contract interactions, Cardano enhances consensus efficiency while maintaining security, maximizing throughput. These layers work together seamlessly to ensure safe and efficient value transfer—Cardano researchers have even published papers suggesting TPS could reach the millions.
Network Stability
Outside Ethereum, many competing blockchains offer superior base-layer performance. Their distinct computational and performance improvements open unique use cases for developers and markets, leading to divergent development paths in DeFi, NFTs, GameFi, and other DApps.
Indeed, the success of Solana and Fantom has proven the necessity of high performance for DeFi, NFT, and GameFi applications.
At the same time, frequent outages or excessive centralization invite criticism. To date, despite hosting nearly $19 billion in value, Cardano has never experienced a network outage—stability reigns supreme.
Conclusion
All that’s past is prologue. In 2018 and 2021, we witnessed major waves of “blockchain fever,” giving rise to new competitive chains like Solana, Terra, and Fantom. These projects forged distinct paths, both in terms of technical architecture and practical DApp innovations.
Of course, blockchain competition is fiercely brutal. Cardano, having entered the smart contract era less than a year ago, remains in a very early stage. The core team’s primary focus remains on building and refining foundational infrastructure; ecosystem development will require sustained effort.
Yet this is precisely where its breakout potential lies. At least for now, just as Solana has Solana Ventures and Avalanche has Ava Labs, Cardano’s world centers largely on Adaverse as its “rainmaker.” Whether it can successfully connect projects across all sectors of the Cardano ecosystem and act as a pivotal hub for synergy—only time will tell.
About Adaverse
- Official Homepage: adaverse.co
- Twitter: @Adaverse_Acc
- Facebook: Adaverse Accelerator
- Instagram: @adaverse_acc
- Medium: Adaverse Accelerator ; Adaverse Asia
- LinkedIn: @Adaverse
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