Cardano Monthly report - March 2023

March was an eventful month for the Cardano ecosystem, with significant developments across various fronts. Let's have a look at some of the key developments.

TVL Explosion
The Cardano ecosystem experienced a surge in Total Value Locked (TVL) in its DeFi sector. The TVL, which had been steady at 200 million ADA for months, has been on a consistent climb since the end of January and reached an all-time high of 380 million ADA. Although the current price of ADA is less than half of what it was in April and May of 2022, the Volume in USD has been showing signs of a bounce, achieving a similar volume as seen during the mentioned time. Fellow Cardano Captain Bruno wrote a great article exploring this in more detail here.

This growth is partly due to the launch of highly anticipated DeFi projects such as Djed by Coti, Indigo Protocol, and Liquid Finance. Indigo Protocol, a Synthetic Asset Platform launched at the end of 2022, has already accumulated 63 million ADA in TVL, making it #2 for TVL on Cardano.

Djed, an over-collateralized stablecoin developed by IOG, was launched on Mainnet on the 31st of January 2023, and has accumulated over 34 million ADA in TVL, making it #4 for TVL on Cardano. Lastly, Liquid Finance, a decentralized interest rate protocol for lending on Cardano, launched on February 2nd and has accumulated close to 24 million ADA in TVL in under 2 months, making it #6 for most TVL on Cardano.

Djed Update
Despite the growth, some challenges were encountered. Cardano's newest algorithmic stablecoin, Djed, faced its first test in the wake of the recent storm in the stablecoin sector. The reserve ratio of the protocol is at 491%, giving a strong degree of assurance to Djed holders that the protocol will be able to maintain its peg for the foreseeable future.

Hydra
One of the most notable events was the progress made on Cardano's Layer 2 scalability solution, Hydra. The Hydra team successfully ran a demo of Hydra on the mainnet, bringing the network one step closer to main net release. Hydra aims to provide low latency, high throughput, and minimal transaction costs, which could significantly improve Cardano's transaction speed.

Cardano's founder, Charles Hoskinson, also commended the growth of the ecosystem in a tweet. According to statistics shared by Hoskinson, 1,221 projects are currently building on Cardano, with 119 already launched. Additionally, the Cardano network has processed 63.9 million transactions, and there are 8.06 million native tokens spread across 71,128 minting policies. The ecosystem's growth was further augmented by CoinLedger, which announced support for Cardano and launched an automatic tax reporting service for its users.

Cardano and Ethereum take a significant step to increased compatibility
Another significant development was the upcoming feature on Milkomeda, which will enable Cardano users to use any Cardano (ADA) wallet to access smart contracts on the Ethereum Virtual Machine (EVM). This feature will expand Cardano's utility, allowing all EVM users, including those who create smart contracts, to receive staking rewards through Milkomeda. There will be a article focused on the development of EVMs later in the week.

Clay Nation Update
The Cardano ecosystem also witnessed significant developments in the NFT space. The Clay Mates NFT startup's Cardano-powered project, Clay Nation, became the first Cardano project to be integrated into The Sandbox, pushing interoperability further in Web3. Clay Nation is a collection of 10,000 characters created from hand-crafted, randomly-assembled clay traits, with each character being a one-of-a-kind digital collectible stored on the Cardano blockchain. The project's main utility and governance token, $CLAY, is poised to be deeply integrated into Clay Nation, where it will be used for any transaction within the virtual environment.

Price Action
On the price front, Cardano's native token, ADA, followed the positive price action seen by Bitcoin. The price was up 10% for the month. The volume of large transactions on the Cardano network returned to above 30 billion ADA, equivalent to $11 billion. However, the majority of token holders, around 76%, continue to suffer losses, with only 19.5% of the total currently in profit.

Flagship Thoughts
March was another good month for the Cardano ecosystem - we continue to see strong development from several key projects. With the significant steps being made to improve interoperability with Ethereum, April should be an interesting month with hopefully with many more users joining the Cardano ecosystem.