Cardano price up and down amid SundaeSwap launch


Cardano (ADA) price rose and collapsed on the same day, starting with the excitement surrounding the launch of its first decentralized exchange, the DEX SundaeSwap, and then following Bitcoin’s downward trend.

SundaeSwap’s wins and failures

ADA’s price was up about 10% in the past week, linked to the launch of Cardano’s beta version of its first decentralized app (DApp) SundaeSwap, a decentralized exchange (DEX) that enables token staking and aims to “not only access to financial services, but also the core business model itself.”

“We are launching with a Beta label because while DEX’s smart contracts are 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 the existing transaction limits on the Cardano blockchain. ”

The launch of SundaeSwap includes the inclusion of its utility token SUNDAE, which will allow holders to vote on the governance protocol, plus trade, iron and lend coins. The price of the token is determined by the community as proof of its decentralization goals.

“The Sundae Token is a utility token that is 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 we all believe in. As part of that, we strongly believe that this protocol is not for us, the company that wrote the software, but for us, the entire SundaeSwap community.”

They explained that at the launch of the protocol, 7% of the community supply of the token would be “locked up by the DAO in a smart contract called The Taste Test”, adding that at the end of ten days “all these tokens will be used to create the ADA/Sundae liquidity pool and establish the initial price for the token.

Not long after trading on the DEX started, users were displeased with congestion on the net, orders pending for more than hours, and failed trades. The SundaeSwap team had warned about this possibility before launch.

CEO Mateen Motavaf addressed the complaints in a bold message that read: “IF YOUR ORDER IS IN THE CHAIN ​​IT WILL BE PROCESSED.

The team had written on January 8: “We would like to inform you all that while orders may take days to process, everyone’s orders will be processed fairly and in the order in which they are received.”

They remain confident that “the protocol can handle its normal day-to-day workload once things settle down.”

Cardano . scalability

The Cardano roadmap currently focuses on several updates to optimize and scale the network, hoping to achieve faster transaction and adopt the Layer 2 Hydra solution.

Partner company Input Output has just announced a promising scaling update that should increase the memory units for Plutus scripts per transaction to 12.5 million. The first change would come into effect on January 25.

“Memory/CPU parameter improvements for Plutus remain one of 11 ways Cardano plans to scale in 2022. Other paths include block size increase, Pipelining, Input Endorsers, Node enhancements, on-disk storage , sidechains, Layer 2 Hydra scaling solution, Compute Offloading and the Mithril solution.”

– Input output

Problems aside, Cardano has already gotten stronger in its competition with Ethereum, sometimes boasting higher trading volume and lower costs.

Related literature | Cardano enters the Basho stage: how it improves performance

Bitcoin behind Cardano crash?

Today, Bitcoin fell about 10% to below $38,000. At the same time, the total market cap fell below $2 trillion.

Analysts have previously claimed that Bitcoin rules the health of the crypto market, so the downward trend could affect other coins such as ADA.

Many enthusiasts expected an upward trend for the Cardano coin in hopes that the price would reach $2 amid future optimizations and the launch of SundaeSwap, but this setup has been spoiled.

The launch of the SundaeSwap pushed Cardano towards a 7.5% gain from its day-low price of $1.32 to $1.42 and then stabilized at $1.40. Then, following the crypto market’s downward trend, ADA fell to around $1.20.

The market’s overall downward trend followed general concerns about a more aggressive Federal Reserve expecting higher interest rates. It also happened in parallel with Russia’s announcement of a crypto ban.

ADA trades to $1.2 in the daily chart – Source: ADAUSDT at TradingView.com

Related literature | Cardano hits bottom? What to Consider Before Rushing to ADA

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