Cardano Spotlight: Funded 11, State of Cardano Q4, and Institutions

Author

Utsav Sheth
February 16, 2024

Hi,

What's Spotlight? Every week, we highlight the most interesting events happening around Cardano. We want to help you cut the noise and find the signal.

Catalyst Fund 11 has closed, and the results are surprisingly good! Let's discuss Catalyst, the state of Cardano, and institutional adoption!

Funded 11

Catalyst Fund 11 results are in! Check it out now.

Three hundred proposals have received a grant of $30M! Nearly 1/3rd of the 920 proposals have been approved for funding. 

This round was immediately after Fund 10, leading to various new projects being funded. Let's talk about some of the best projects according to us that we need to watch out for:

  • Interop: Cardano isn't as well connected to other ecosystems. Maya protocol, a friendly Thorchain fork, has been funded to build native cross-chain swapping with Ethereum, Arbitrum, Cosmos, Bitcoin, and more ecosystems! Another proposal by Rosen brings interop with Ethereum and the EVM ecosystem.

  • Real-World Asset Tokenisation: Real-world assets are amongst the fastest-growing sectors in crypto. NMKR, FluidTokens & IAMX have been funded to create a platform to issue and trade compliant security tokens!

  • Optim: Optim has received over 1.25M Ada in funding to work on their various products like a synthetic stablecoin, an account model on top of UTXO, and building finance vaults!

  • Handle Chat: Ada Handle is one of the most widely used projects on Cardano. They will be building a crypto-based messaging platform using Cardano.

Fund 11 has funded various amazing projects and given chances to new projects to build some cool projects. Excited to see these come alive in the next few months!

State of Cardano Q4

Messari has published its Cardano Q4 report in association with IOG. Here are some of the key points that have been covered in the report:

  • Cardano's TVL is up 166% QoQ and 693% YoY. The big contributors to this were an increase in Ada's price, new projects going live, and increased participation in Cardano DeFi.

  • Cardano's stablecoin valCardano'ssed 37% QoQ and 673% YoY. The stablecoin market rapidly increased in the year's first quarter but has been growing slowly ever since.

  • ADA's price increased 127.2%, outpacing the overall crypto market's increase of 53.8%. It ranks 4th in performance in the top 20 coins.

  • There is an increase in focus on a sidechain-centric roadmap, with work being done on the sidechain toolkit. Midnight will be the first chain leveraging Cardano's security and decentralization.

  • Hydra and Mithril have been shipped to mainnet in the past year, with active governance feature testing done on the SanchoNet testnet.

  • The governance Cardano'sn brings us to Delegated Representatives. CIP-1694 is expected to go live in the Chang Hardfork during H1'24. This will bring us the first iteration of on-chain governance. 

You can read the report in-depth here: Messari Cardano Q4 Report.

Institutions have arrived

It's long been a crypto narrative that "institutions are coming" and has been a point of speculation for years. Last cycle, we saw some institutions like Microstrategy & Tesla adopting Bitcoin, but the adoption was quite contained.

The BTC ETFs have brought high interest in crypto from institutional investors. Blackrock and Fidelity are closing into $10B inflows into their Bitcoin Spot ETF! We have the biggest asset managers in the world adopting and marketing crypto!

Post 1 month of launch, we still see net inflows around the $400-500M range, which is unprecedented. For reference, Elon's $1.5B pushed Bitcoin up by more than 20% in 2021.

Coinbase is now clocking in almost $1B in revenue, and the share price has increased by 6x in the last year. This and mining stocks have shown us a clear interest in Bitcoin and related companies.

Another big catalyst for the year will be an Ethereum Spot ETF, which has been predicted to get approved with a 60% probability. Ethereum ETF will be another big win in the regulatory struggle, and it provides the path for other cryptocurrencies to reach this point. Unlike Bitcoin, Ethereum is a very active project and is under constant development; it would be a powerful signal for other cryptos if Ethereum could cross this hurdle.

Cardano hasn't yet had a strong adoption in institutional circles and has been avoided mainly by professional investors. It has found its place in funds like the Grayscale Large Cap Fund, which holds over $72M Ada. Cardano is still a long while away from seeing a spot ETF, but with governance and client diversity, we are getting closer to the development-dependent decentralization of Ethereum.

However, it's true today: institutions have arrived, and crypto is mainstream.

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