Cardano was presented as a third-generation crypto, based on PoS consensus. Now Ethereum goes PoS. But some people say it is still technically way beyond Cardano. Is Cardano vs Ethereum feud about to start on full scale?
Usually, during big crypto market crashes Bitcoin and Ethereum appearing the most stable tokens as other altcoins fall deeply.
But the last market collapse shows some interesting tendencies that can actually tell a lot about specific coins.
You might notice that ADA token price still isn’t falling as dramatically as other cryptos. For instance, last week Bitcoin lost 31% of its market capitalization and Ethereum lost almost 40% of it.
Meanwhile, Cardano holders’ withdrawals weren’t so bad and the ADA token lost only 25% of its market cap.
It’s a sign that Cardano vs Ethereum feud ha already started and is going to the favor of ADA.
Some say that this is the result of big institutional investors who do not sell the big share of ADA. And some believe that the worst for the Cardano community is yet to come.
Here are a few thoughts about the possible Cardano’s future. And of course the answer on its ‘Ethereum killer’ status.
When did the Cardano vs Ethereum race begin?
Launched late in 2017 Cardano is nearly two years younger than Ether. And obviously, ETH has been outperforming ADA all the time. But there are more similarities between these networks than you might think.
Firstly, the Cardano founder is an Ethereum co-founder Charles Hoskinson who launched the engineering blockchain company IOHK (Input Output Hong Kong) with his former Ethereum colleague Jeremy Wood.
The history tells that Vitalik Buterin dropped Hoskinson from Ethereum in 2014 after the dispute over whether the project should be commercial (as Hoskinson saw it) or a nonprofit (as Buterin saw it).
Secondly, Cardano’s main Proof-of-Stake Ouroboros protocol is very similar to the Ethereum Casper upgrade that was designed for the ETH PoS transition in 2019.
As we see today, Cardano developers are still using those protocols and the Ethereum team changed a lot to make their Merge in late 2022.
By the way, having all the ‘Ethereum killer’, ‘next Bitcoin’, and ‘third-generation crypto’ status, Cardano hasn’t approached anywhere close to ETH and BTC performance during the last five years.
Some say that ADA is still hugely underestimated, and some just believe that the ADA team presents itself kind of arrogantly.
What is going on with Cardano right now?
According to the last CoinShares’ digital asset monthly fund manager survey, institutional investors are increasing their digital asset allocations to Cardano, XRP, and Polkadot at the expense of Ethereum.
The survey says that there are a number of factors that can explain the increased investor interest in Cardano and XRP compared to Ethereum. Among these factors are speculation and investor sentiment about recent developer activities across the respective blockchains.
“The higher potential upside to the all-time high price for Cardano, and XRP compared to Ethereum could be the incentive for speculators to channel their asset allocations into these digital assets, albeit for the long term,” the survey says.
The second influential reason is the so-called new Ethereum blockchains with Cardano, Polkadot and others included. This type of PoS crypto should overcome the challenges faced by the Ethereum platform. Such as high fees, relatively low transaction speed, and energy-dense mining.
Cardano, Polkadot, Tezos, Solana, Avalanche, Zcash, NEAR, Stellar, and others ‘Ethereum killers’ are beating to attract investors’ attention right now. But ADA succeeded more in it.
The third reason is the last Cardano Alonzo upgrade that came in September 2021 and provided fully functional smart contract capability with NFTs minting and bunches of Decentralized Applications runs. Some say that faster speeds and lower transaction costs have made the Cardano ecosystem a direct competitor to the Ethereum Network.
And last but not least is the coming Cardano Vasil hard fork upgrade that should massively improve the network’s scalability and performance. As with all the other tokens, all investors’ eyes are on the Cardano price ahead of the hard fork.
What do experts say?
Lately, venture capital giant a16z published its own extensive study of the crypto world as of 2022. The study does not consider Cardano as an Ethereum competitor.
Moreover, the a16z’s report says that there are still no equal projects to Ethereum in the Web3 space, and those ‘who can represent the real competition are still far behind’.
Indeed, the Ethereum network still has over 90 percent of the NFT market. “This is going to be a very important year for Ethereum, a kind of a make-or-break year,” the global crypto leader of PWC Henri Arslanian once said.
a16z analytics underline that Ethereum’s superiority is based on several crucial metrics: the ratio of monthly active developers, the number of active addresses, and the number of daily transactions.
By all these parameters Ether goes far ahead of Cardano. And despite Buterin’s platform popularity, ADA attracts more and more people right now.
How is the Ethereum Merge going?
Being literally months away from the biggest update in its history, the PoS-consensus transition should make the Ethereum network more environmentally friendly and deflationary.
Successfully launched on the Ropsten test network, the Merge is a PoS-consensus transition on the Beacon Chain mainnet.
As we know, once Ethereum shifts from PoW to PoS, validators who have staked the required 32 ETH will take over the role of adding new blocks to the blockchain.
In other words, ETH miners will be replaced by stakers (aka validators) that should make the network more efficient but also more decentralized
Because of this decentralization, some critics think that the PoS-transition can actually play a bad joke on the Ether platform.
Recently the head of blockchain and crypto research at trading platform Uphold Martin Hiesboeck commented on the topic.
“Ethereum is in trouble and we don’t see a quick way out. The entire idea of staking Ethereum was nonsense from the start, as we pointed out months before the first anticipated launch date for Merge last year,” he said.
Hiesboeck thinks that the growing number of decentralized finance hacks that are happening on the Ethereum network is the main concern for current ETH investors.
Cardano vs Ethereum final battle
After the recent Terra platform crash Charles Hoskinson has jokingly invited Vitalik Buterin to his team.
“it’s not too late to come to Cardano,” IOHK founder tweeted.
If joking aside, the real reason is both Cardano and Ethereum are approaching their watersheds right now. Ethereum with its Merge and Cardano with its Vasil hard fork.
Moreover, ADA should pass the current test that institutional investors and speculators have laid upon it.
If this test will be passed in 2022 – Hoskinson has at least two years more to prove to Buterin that he was right back in 2014. If not – ADA risks stretching its development years more.
The simple fact is Ethereum’s price has grown 1600 times since its launch to the date.
And the Cardano value multiplied only 25 times during the last five years.
That’s all folks.
Sources: Bloomberg, PlanetCrypto, ZyCrypto, UToday
