Cardano’s unwavering dominance in the DeFi market faces unexpected competition as Base Chain, a newly formed network, soars past it with astounding growth.
Base Chain Is a Rising Star
Base Chain’s meteoric rise has enthralled the cryptocurrency and DeFi communities just weeks after its launch on August 9th. Notably, this newcomer has not only attracted the attention of industry titans such as Coca-Cola but has also managed to outperform Cardano, a seasoned veteran, in various ways.
Base Chain is a testament to rapid user acceptance, surpassing 1 million users in less than two weeks. Its popularity is apparent, with a startling 100,000 daily active members. Due to its fast expansion, base Chain has outperformed Cardano in several categories, including Total Value Locked (TVL) and the number of protocols supported.
A Look at the Figures
Cardano’s DeFi TVL is valued at $160 million, ranking 14th overall. On the other hand, Base Chain has a TVL of $184 million and is ranked 12th. What’s surprising is that, despite Cardano’s early lead, Base Chain’s DeFi ecosystem has grown four times its rival’s size, supporting 79 protocols to Cardano’s more modest 24.
Furthermore, Base Chain’s Layer-2 network has surpassed Cardano with Friend regarding the user base. So, a Base Chain DApp boasts over 40,000 daily users. Base Chain’s network activity has likewise topped that of Cardano, performing more transactions in its first week than Cardano does in an entire month.
When comparing apples with oranges
However, it is critical to understand the underlying differences between the two chains. Cardano’s systematic approach is rooted in its own Proof-of-Stake chain, distinguishing it from most other blockchains. This distinguishing feature limits its interoperability with most DeFi projects, mostly built on Ethereum.
On the other hand, Base Chain functions as a Layer-2 chain atop Ethereum, allowing access to a more excellent range of well-established DeFi protocols. Base Chain is compatible with Uniswap, SushiSwap, Stargate, and other platforms, giving it a competitive advantage.
Cardano’s Resilience in the Face of Adversity
While Base Chain’s exponential rise is making headlines, Cardano is still in the game. Despite recent market setbacks that caused the value of ADA to fall by 18%, its DeFi TVL remains at an all-time high, over 600 million ADA. If the price of ADA can be restored to pre-market crash levels, a DeFi TVL of $186 million is well within sight, potentially outpacing Base Chain once more.
Nonetheless, unfavorable market circumstances and diminishing network activity pose hurdles for Cardano, raising investor fears.
Base Chain’s quick development in the ever-changing cryptocurrency world poses a significant challenge to Cardano’s DeFi dominance. As both systems continue to manage market volatility, the question is whether Cardano can retake its lead or whether Base Chain’s momentum will prove impossible.