Were there any wins from the FTX collapse?
A week on from the collapse of FTX, we look at which project may have been the winner.
Unless you’ve been on a remote island for the past week, you’ll know that the crypto markets are in free fall thanks to the fraudulent behavior of FTX and their CEO, SBF. You’d be forgiven for assuming that no corner of crypto was unaffected, but this is not the whole story. The FTX fallout does seem to have had some positive outcomes for the Cardano ecosystem, and I’ll try to cover why this may be the case in today’s outpost.
Cardano’s ADA token is down only 7% in the last seven days, which is a modest decline in value relative to many other tokens.
The growth for Cardano
Cardano Blockchain Insights claims that on the day FTX failed, activity on the Cardano network spiked. As a result, on Nov. 8, there were 10,360 new addresses on the network, which is a record high compared to recent months when the average was fewer than 1,500 each day.
According to Santiment, a different crypto analytics website, the number of active addresses on the Cardano network rose by 16,927 on November 8 and 9. The network had had an unprecedented spike of transactions that day, reaching 391,805, or approximately two and a half times the average amount.
No FTX exposure
ADA likely escaped a more substantial drop because they did not list the token on the FTX spot market. A week ago, FTX CEO Sam Bankman-Fried stated ADA would soon appear on the exchange, explaining its absence by the laughable excuse that Cardano is a “new” blockchain. For context, work on Cardano began in 2015, with a public launch in 2017, and they launched Solana in 2020.
The downfall of Solana
Cardano also benefited to some extent since the direct competitor Solana dropped from the top of the market cap, losing nearly 40% in value because of FTX and affiliates' direct stake in its equity.
Before the FTX news, Solana had already seen many NFT collectors move to the Cardano ecosystem, and the close relationship between FTX and Solana will probably accelerate this move. In addition, offers of support like the below will surely help.
You can also see how, despite the market downturn, Cardano NFTs have shown transaction volume and appreciating prices over the last seven days.
The Cardano approach
The final reason for the increased interest in the ecosystem may be because of the fundamentals. Cardano has always prided itself on being a non-VC-backed blockchain with a more academic approach to development. This has resulted in many haters, but with all the fallout over the last few months from poorly planned projects like Luna and now the effects on other projects like Solana, which were heavily VC-backed, maybe Cardano’s approach is winning over some of those who previously doubted the project.
While Cardano may be the short-term winner from the FTX events, the industry as a whole is the loser, and it will probably take a long time before faith is restored and interest in the crypto industry picks up. Between now and then, we surely will see moves to regulate the industry better, which is reasonable, is sorely needed. Let's hope that, as a community, we’ve learned some lessons. We get the sensible regulation to enable mass adoption and return to building!
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