Cardano (ADA) currently struggles to attract new users, even with its most significant upgrade on the horizon. The analytic platform IntoTheBlock reports that the number of addresses holding ADA has stagnated at around 4.45 million since early 2023. This plateau follows a period of rapid growth during the last bull cycle.
Historical Growth of ADA Holders
In early 2021, ADA holders numbered under 1 million. By September 2021, this figure surged to nearly 4 million as the token reached its all-time high of $3.10. This growth reflected Cardano’s promotion as a viable alternative to Ethereum, the largest smart contract network. However, after hitting the 4.45 million mark in 2023, the growth in wallets has slowed significantly.
Anticipation Around the Chang Upgrade
Despite the excitement surrounding the upcoming Chang hard fork, which aims to enhance decentralized governance, new user adoption remains stagnant. Market sentiment has shifted, with users increasingly gravitating toward platforms like Solana and Base. These blockchains have become popular for launching meme coins, which are currently trending in the crypto market.
For example, Solana hosts high-value meme coins such as BONK, while Base features BRETT, boasting a market cap exceeding $900 million. In contrast, Cardano’s meme coin, SNEK, only has a market cap of $54 million. This disparity highlights the challenges Cardano faces in attracting new users.
Steady Engagement Amidst Stagnation
Despite the slowdown in new wallet creation, Cardano maintains a steady level of active users and transaction volumes. The network processes approximately $7.2 billion in daily on-chain transactions. This impressive activity results in a low NVT (Network Value to Transactions) ratio of 2.62, indicating that ADA may be undervalued.
Moreover, long-term investors now hold nearly 40% of the total ADA supply. This figure demonstrates a strong level of confidence among existing holders.
In conclusion, Cardano stands at a crossroads. While it prepares for a transformative upgrade, it must overcome significant hurdles to attract new users. The stagnation in wallet growth, coupled with competition from alternative platforms, poses challenges for Cardano as it seeks to expand its ecosystem.
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