Journalist
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Key Takeaways
Why did Cardano fail to implement its liquidity boost plan?
The enactment window expired before the governance could act on it. Overall, it could derail DeFi activity.
How’s the ADA market holding up?
In the last 10 days, whales dumped 400 million ADA, triggering a 27% price decline.
Despite lagging behind its peers on certain fronts, Cardano [ADA] plans to double down on privacy, AI, and DeFi to fully capture the next wave of mainstream blockchain adoption.
In fact, it has adopted the Ethereum [ETH] summit and regional ecosystem hubs model to foster collaboration between enterprises and academia.
The latest Cardano Summit 2025 in Berlin, Germany, was part of such an initiative. According to the attendees, including venture capital Tim Draper, trust has emerged as the key value proposition for blockchains.
Assessing Cardano governance actions
However, the governance actions have fallen short in delivering the project’s ambitious expansion goals.
For example, Cardano’s DeFi activity remains relatively low compared to its peers. At the time of writing, it had only $214 million in TVL (total value locked), while Solana boasted figures of $9 billion and Ethereum had $68 billion.
In fact, the DeFi liquidity is so low that one trader lost $6 million while swapping into an illiquid stablecoin on the chain.
Although the Cardano Foundation and Charles Hoskinson, the chain’s founder, acknowledged the liquidity issue, governance action to remedy it failed.
The plan to create a 50 million ADA fund to boost stablecoin and DeFi liquidity was approved, but failed to be implemented within the set timeline (expired), rendering it ineffective.
Source: Cardano
For perspective, only a proposal that has been approved and enacted within a specified timeframe can take effect and be implemented.
At press time, the only active and crucial proposal was a 5 million ADA loan to help list Snek [SNEK], a token within the Cardano ecosystem, on global platforms.
A similar plan was floated recently but was rejected, raising concerns about how the project plans to help the ecosystem players or the so-called “supporting DeFi” initiative.
The on-chain traction has also cooled off. After a slight uptick in network activity between July and August, Cardano’s on-chain traction declined and stagnated, with a daily average of around 20,000 active addresses.
Source: Santiment
Meanwhile, the recent bout of ADA sell-off was primarily driven by whale wallets holding 10 million to 100 million tokens (yellow). This cohort offloaded over 400 million ADA in the last ten days.
Over this period, ADA dropped further by 27% to $0.44, driving its overall losses to 66% from last year’s peak of $1.3.
Source: Santiment