Key points
According to CoinMarketCap, the price of Cardano has risen by more than 30% over the past week, while other top cryptocurrencies have risen by just a few percentage points.
Last week, IOHK, the developer organization that built the Cardano blockchain, announced that the project had entered the "Basho phase" — the third of five phases of its development roadmap.
Once all the upgrades for this latest phase are complete, the programmer promises cardano that it will see huge gains on other blockchains and the number of transactions it can process per second.
The past few weeks have been quite "buzzing" in the cryptocurrency space, with most of the top 10 items trading sideways or up a percentage point or two. That's not the case with Cardano (ADA), whose price soared more than 30% last Monday to as high as $1.62. Last Monday, Jan. 10, it traded as low as $1.11. So what causes this? Let's comb through:
What is Cardano ADA?
Cardano is a well-known alternative to Ethereum, the second most popular token by market capitalization, as ADA is building its smart contract crypto network to surpass the ones currently available. Smart contracts are mini-software programs created by developers to automate and securely execute a range of blockchain-based services. For example, in decentralized finance, smart contracts automatically authorize and manage lending, asset trading, and interest-bearing products.
Cardano programmers are continuing to upgrade and complete the five development phases of their project. They announced last week that they were entering phase three, which could be the main driver of ADA's 30% price increase since last Monday.
Cardano is in the latest stage of development
The third phase of Cardano's development roadmap, called "Basho," promises a number of major upgrades to the ADA network, including scalability and the ability to work across different blockchains and on their own.
Specific to scalability, Cardano will be able to process millions of crypto transactions per second once Basho is fully deployed. Currently, Solana is one of the leading blockchain networks, but can only scale to process 50,000 transactions per second (TPS). Once Ethereum completes its ETH 2.0 upgrade, its transaction speed will still be only about 100,000 TPS – Cardano's advantage.
Another major upgrade to Cardano will be its interoperability across other blockchains. When Basho is fully launched, Cardano will be able to communicate with other blockchains and seamlessly move digital assets, NFTs, smart contracts, and more between networks. Most blockchains require clunky "bridging" patches to move transactions across different networks. Again, advantage Cardano.
Finally, there are some additional Basho upgrades that will make Cardano transactions faster, cheaper, and more secure than other blockchains.
Should you enter?
Given this potential upside, it's no surprise to see some investors jump into the project in the classic "buy rumors, sell news" approach and push prices to double digits in the short term. But in the long run, its valuation is still lower than Ethereum. In any case, this is opinion and speculation and is not a substitute for your own research. However, it might be a good idea to keep an eye on Cardano.