Cardano ADA: Dead Chain or Crypto’s Next Big Comeback?

Critics are calling Cardano to be a dead project, others say it’s just evolving.  That was Charles Hoskinson responding to this criticism. But with TVL shrinking and user growth stalling, it’s fair to ask: has Cardano lost its way?

In this episode, I will examine the data, the decisions, and the deeper forces shaping its future. Because what happens next could define whether Cardano fades into history. Or, alternatively, stages one of the biggest comebacks in crypto.

Cardano’s TVL

So, the Cardano issue at hand is the criticism about its DeFi usage and TVL numbers. To be clear, they’re not good. Now, Charles Hoskinson came out and defended Cardano. That’s what you would expect from any CEO or founder. However, it also depends on what he actually mentioned. But first, take a look at my most recent Cardano video here. 

So, Hoskinson pointed out that the low TVL (Total Value Locked) on Cardano isn’t primarily a technical limitation. Instead, he points the finger at user behavior and a coordination problem. According to him, many $ADA holders are staking or holding. This, instead of actively using DeFi protocols on Cardano. 

For the record, Cardano ranks 26th on this DeFiLlama chart for TVL among all chains. The current TVL is $244 million. Compared to other L1s, that’s, unfortunately, not great. Now, Cardano’s TVL was in early January around $653 million. That’s a 2.6x from where it is now, but still a far cry from $1 billion. Or the $5 to $10 billion TVL that Hoskinson thinks Cardano can get. In contrast, Sui’s TVL is $1.6 billion, and Sui is only 2 years old. Solana’s TVL is a good $10 billion, and Ethereum’s TVL is almost $80 billion.

$ADA Staking

So, before I continue, let’s take a closer look at $ADA staking numbers. Currently, there’s 36.5 billion $ADA in circulation. Out of these, Pooltool claims that 21.78 billion are currently staked. That gives a 57% staking percentage, or around $11.5 billion at the current $ADA price. Now, that’s a good number. However, to put this in perspective, according to Coinbase, the current staking % for $SUI is 75%.

Source: Cardano forum

However, Hoskinson argues that all staked $ADA are not part of the TVL. Unfortunately, that argument doesn’t hold. In general, native staked tokens don’t count towards TVL. The primary purpose of TVL is often to measure assets locked within dApps. That includes the broader DeFi ecosystem built on top of a chain. However, that excludes the base-layer consensus mechanism itself. 

However, assets locked in liquid staking protocols are typically included in that protocol’s TVL.  In other words, these do contribute to the overall TVL of a chain’s DeFi ecosystem. For instance, Lido for $stETH. So, Ethereum’s DeFi TVL includes Lido’s TVL. 

In essence, staking is a form of “locking” value. However, the type of staking determines its inclusion in standard “chain TVL” metrics: 

• Native consensus staking is usually separate.
• DeFi protocol staking (including liquid staking) is part of TVL.

So, here’s the proof that Hoskinson’s remark about staked $ADA not being in the TVL misses the mark. The numbers don’t lie and TVL is low, and DeFi on Cardano is showing very little activity. So, let’s see what Hoskinson and Cardano plan to solve this issue.

What Are Cardano’s Plans

So, the problems are on the table. But what are Cardano and Hoskinson going to do about them? Because it doesn’t stop there. For example, Hoskinson acknowledges a few things. One is that the network’s low activity impacts the partnerships and liquidity. Another issue is that the lack of external integrations further limits on-chain adoption. It almost feels like a catch 22.

Hoskinson worded this differently. He mentions that these issues create a “chicken-and-egg” loop for its ecosystem. So, he came up with some solutions. Here are two that he recently advocated.

1. Linking Cardano with Bitcoin. He mentioned this already on various occasions.
2. Using real-world lending to pull in liquidity.
   

These two combined should boost Cardano’s DeFi TVL. Another trump is the Midnight Network. This is a privacy focused side chain. The Midnight airdrop claim has recently ended.

RealFi is another card that Cardano can play. This is a microfinance platform. Its main initiative is to target African markets. Now, both Midnight and RealFi can integrate with BTCFi on Cardano. As a result, you can lend $ADA and $BTC and convert these into stablecoins. Now you can use these in real-world lending protocols.

The Leios Upgrade

There’s also a major network upgrade in the pipeline. That’s the Leios upgrade. This will introduce a parallel block structure. This means that it enables various transaction streams rather than one linear chain. 

In other words, this should increase the chains’ transaction speed. There’s even talk of 10,000TPS (transactions per second). However, this is a theoretical TPS. Currently, Leios has moved from pure research into active engineering. Still, there’s no timeline for its launch available. Cardano is also well known for its slow but thorough pace. So, this launch could well happen in 2026.

However, be aware that launching Leios is no guarantee of a better user experience. Other factors also play a role in this. Think of ecosystem adoption, DeFi usage, protocol integration, or sidechains like Midnight. They all play a part in this story. 

You should also not immediately expect 10,000 TPS. This is an engineering goal, not a guarantee of live-network performance. The speed benefit is real; however, it will likely be gradual. Don’t expect an overnight “flip switch and instant 10k TPS” transformation.

Cardano’s Current State

So, all together, Cardano’s current DeFi state is not great. However, Hoskinson acknowledges this and is working on solutions. Knowing Cardano’s operating style, this could take some time for all the pieces to fall in place. So, from that point of view, the current $ADA price of around 53 cents can be a great entry point. The question is, can Hoskinson move the Cardano crowd to become active DeFi users? Can he save Cardano from becoming a dead chain?

So, it looks like Cardano isn’t dead, but it’s in a transitional phase. TVL and DeFi activity are undeniably low. However, the core infrastructure, user base, and development pipeline remain strong. Hoskinson’s solutions require adoption and coordination, not just technology. If liquidity and real usage return, Cardano still has room to recover and evolve.

What is your view on this? Do you think that Cardano has the power to do another turnaround? Can Hoskinson pull something out of his hat to make the chain livelier? Let me know in the comments and do join our lively discussions on X and Discord.

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