A recent report by crypto research firm K33 has provided some form of warning to Cardano holders as the firm outlined reasons why they should offload their ADA tokens. One of them happens to be a common negative narrative that has plagued the Cardano network for some time now.
Why ADA Holders Should Sell Their Tokens According to the report written by K33’s Head of Research, Anders Helseth, ADA holders should offload their ADA tokens because there is no “proof of Cardano being used for anything.” This, the report claims, is something that will, in the long run, affect ADA’s utility.
Helseth noted that Cardano supporters may want to counter his assertion with an argument about how the network sees an average of around 90,000 daily transactions. However, he suggested this argument couldn’t suffice as these blockchain transactions do not necessarily equate to “meaningful transactions.”
According to the report, nothing else goes on the Cardano network other than exchange transfers and a “group of bagholders fabricating blockchain activity.” These statements further echo the criticism of the network as a “ghost chain,” with analysts like Lady of Crypto predicting that ADA will not perform well in the next bull run because no one was using Cardano.
Further elaborating on his position, the K33 analyst remarked in the report that the real activity goes on in the protocols as there is always outside proof of that activity. In Cardano’s case, though, there is a lack of this “outside proof,” which serves as a ‘proof by contradiction.’
ADA price at $0.53 | Source: ADAUSD On Tradingview.com Proof of Inactivity On Cardano The report claims that the best example of inactivity on Cardano is the stablecoin situation. The absence of fiat-backed stablecoins, including the foremost USDT and USDC, generally means that no “meaningful DeFi” occurs on the network, Helseth said.
Furthermore, the fact that Tether and Circle (who issue the USDT and USDC, respectively) haven’t integrated their stablecoins onto Cardano also proves this, the analyst claimed. He stated that the only stablecoins that exist on the network are Cardano-collateralized ones that are valued at 76 cents to the dollar, making them worthless, in his opinion.
The report concluded with an assertion that Cardano will never become big and instead hinted that the network will likely drift into relevance over time like some others. That is why ADA holders are advised to sell their tokens, as Helseth believes that they would become worthless over time.
ADA’s market of over $18 billion is said to be only worth that because it is a “well-established coin” that is tradeable everywhere. As such, this makes it one of the go-to choices for aspiring crypto investors. However, K33 claims that ADA will gradually disappear from the crypto map as all price signals point to that happening.
Featured image from CryptoRank, chart from Tradingview.com
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Scott Matherson Scott Matherson is a leading crypto writer at Bitcoinist, who possesses a sharp analytical mind and a deep understanding of the digital currency landscape. Scott has earned a reputation for delivering thought-provoking and well-researched articles that resonate with both newcomers and seasoned crypto enthusiasts. Outside of his writing, Scott is passionate about promoting crypto literacy and often works to educate the public on the potential of blockchain.