Cardano Price Up And Down Amidst SundaeSwap Launch
January 21 2022 - 6:59PM
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The price of Cardano (ADA) surged and plunged on the same day,
starting with the excitement around the launch of its first
decentralized exchange, the DEX SundaeSwap, then following the
downtrend of Bitcoin. SundaeSwap’s Wins And Failures ADA’s price
had been up around 10% in the last week tied to the launch of
Cardano’s beta version of its first decentralized app (DApp)
SundaeSwap, a decentralized exchange (DEX) that allows token
staking and aims to “decentralize not just the access
to financial services, but also the core business model
itself.” “We are launching with a Beta label because, while the
DEX’s smart contracts have been fully audited and the DEX will meet
all industry standards for security, the implementation of fully
decentralized governance will not be immediately possible due to
existing transaction size limits on the Cardano blockchain.”
SundaeSwap’s launch entails the inclusion of its utility
token SUNDAE, which offers holders the availability to vote on
the governance protocol, plus trade, strake and lend coins. The
token’s price will be determined by the community as prove of its
goals towards decentralization. “The Sundae Token is a utility
token central to the healthy operation of the SundaeSwap DEX. We
are focused on building the most useful decentralized exchange
protocol we can, in line with the decentralized ethos that we all
believe in. As part of that, we strongly believe that this protocol
doesn’t belong to us, the company who wrote the software, but
to us, the whole SundaeSwap community.” They explained that at
the protocol’s launch, 7% of the community supply of the token
would be “locked by the DAO into a smart contract called The Taste
Test,” and added that at the end ten days, “all of these tokens
will be used to create the ADA/Sundae liquidity pool, establishing
the initial price for the token.” Not long after trading on the DEX
started, users were dissatisfied about congestion on the net,
orders pending over hours, and failing transactions. SundaeSwap’s
team had already warned about this possibility ahead of the launch.
CEO Mateen Motavaf addressed the complaints in a bolds and cap
message that said “IF YOUR ORDER IS ON-CHAIN, IT WILL BE
PROCESSED ORDERS ARE FAILING DUE TO CONGESTION, PLEASE BE PATIENT”.
The team had written on January 8 “We want to inform you all that
while orders may take days to process, everybody’s orders will be
processed fairly and in the order they were received.” They remain
confident that “the protocol can meet the normal day-to-day load
once things settle down.” Cardano’s Scalability The Cardano roadmap
is currently focusing on several updates to optimize and scale the
network, hoping to achieve faster transaction and adopt the layer 2
Hydra solution. Its partner company Input Output just announced a
promising scaling update that is supposed to increase Plutus script
memory units per transaction to 12,5 million. The first change is
supposed to take effect on January 25. “Improvements in Memory/CPU
parameters for Plutus remain one of 11 ways that Cardano
intends to scale in 2022. Other paths include block size increase,
Pipelining, Input Endorsers, Node enhancements, on-disk storage,
sidechains, Layer 2 Hydra scaling solution, Offloading
computation and the Mithril solution.” – Input Output Issues
aside, Cardano has already grown stronger in its competition with
Ethereum, recording a higher trading volume at times and lower
fees. Related Reading | Cardano Enters The Basho Stage: How It
Improves Performance Bitcoin Behind Cardano Crash? Today, Bitcoin
fell around 10% to under $38,000. At the same time, the total
market cap fell bellow $2 trillion. Analysts have alleged before
that Bitcoin rules over the health of the crypto market, thus its
downtrend could affect other coins like ADA. Many enthusiasts were
expecting a bullish trend for the Cardano coin hoping for its price
to reach $2 amidst future optimizations and SundaeSwap’s launch,
but this setup has been spoiled. The SundaeSwap launch pushed
Cardano toward a surge of 7.5% from its day-low price of $1.32 to
$1.42, then stabilizing at $1,40. Then, following the crypto
market’s downtrend, ADA decreased to around $1,20. The general
downtrend of the market followed the general worry over a more
hawkish Federal Reserve, expecting higher interest rates. It also
happened in parallel to Russia’s announce of a crypto ban. Related
Reading | Cardano Hits Bottom? What You Should Consider Before
Rushing Into ADA
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