The Cardano blockchain, on which the ADA crypto runs, has gained significant momentum recently, with transactions soaring 49% in the second quarter compared to the first quarter. The increase in blockchain load, which is the measurement of data contained in blocks over a specific period, reached 50% during the quarter, peaking at 81% in May.Â
The increase in blockchain activity is considered a positive sign for the Cardano ecosystem, as it indicates growing demand and usage, which usually precedes an increase in token prices.
Summary
Increased transactions on the Cardano blockchain may lead to an increase in the price of the ADA token
The increase in Cardano transactions can be attributed to several updates implemented earlier this year. These updates have not only attracted more users to the network, but also piqued the interest of developers.
A report by Messari, a reputable analytics firm, highlights that both locked value and transactional metrics have seen quarter-on-quarter growth, thanks to technical improvements and increased developer interest.
Although the decentralized exchange Minswap experienced the most significant absolute growth, the contribution of several new decentralized applications (dApps) also played a key role in the overall increase.
The increase in transactions has not yet had an effect on the amount of daily active users; a decline of 4% was recorded over the same period.
This is the fourth decline in address activity in the past five quarters. However, it is worth noting that the ratio of transactions to active addresses has increased steadily over the past five quarters, indicating that the average user is now more active than before.
In the second quarter, the ratio of transactions to active addresses reached 1.19, an increase of 6.1% from the previous quarter and 13.2% from a year earlier.
The increase in blockchain load and transaction activity reflects the growing interest in Cardano’s decentralized finance (DeFi) ecosystem.
According to DefiLlama’s data, about $175 million worth of tokens were locked on Cardano’s blockchain at the time the report was published. Although this figure represents the highest level this year, it is still 50% below the peak of $340 million recorded in May 2022.
Cardano’s network upgrades have led to big results
The increase in activity is the result of key upgrades made to the Cardano network earlier this year.
One of these updates, implemented in June, aimed to reduce epoch transitions and make the blockchain more fluid for network users. To put this in context, epochs are periods of time on Cardano, each lasting 432,000 slots, with each slot equivalent to one second.
During these periods, ADA tokens are staked and new blocks are produced on the Cardano network.
This increased staking activity has the potential to increase demand for ADA tokens as block rewards become more profitable based on overall network activity.
Another significant development occurred in March, when a feature was introduced on Milkomeda. Milkomeda is a network that connects blockchains to the Ethereum Virtual Machine (EVM).
This feature allowed Cardano blockchain users to access EVM smart contracts with any ADA wallet, expanding the utility of the ecosystem and further attracting users and developers to the network.
Conclusions
In conclusion, the Cardano blockchain has seen a significant increase in transaction activity, with the blockchain load increasing by 49% in the second quarter of the year.
This increase in activity is a promising sign for the Cardano ecosystem, indicating growing demand and usage.
The introduction of various updates and expansion of ecosystem functionality have contributed to this growth, attracting both users and developers. If Cardano continues to improve its offerings and optimize its network, it could see even greater adoption and further strengthen its position in the blockchain space.
Investors and enthusiasts are keeping an eye on the ecosystem, as these developments have the potential to positively affect the price of ADA tokens.
