- A crypto influencer questioned Cardano’s high market value despite its lower network usage.
- Cardano’s market cap/TVL ratio was one of the highest in the industry.
A crypto influencer infuriated followers of the popular smart contracts chain Cardano [ADA]which led to a heated debate about the network’s foundations.
What happened?
On a controversial note X (formerly Twitter) message that went viral, MartyParty questioned the rationale behind the ADA token, which commanded a market value of over $23 billion despite having far less network usage.
The influencer went one step further by advising his followers to ditch the token and switch to a ‘performing’ blockchain token.
These comments were not taken well by the Cardano community, who rushed to refute Marty’s arguments.
Some of them even called the transaction-per-second (TPS) data he highlighted outdated, adding a community note below his post with a link to the updated source.
Not the first time
Over the years, many prominent market observers have taken aim at Cardano’s networking capabilities and the justification behind it having a disproportionately larger market capitalization.
Just last month, Bitcoin [BTC] Lawyer and BitMeX co-founder Arthur Hayes cast shade on the network.
The Cardano community has vigorously contested these arguments every time, with some Interrogate using TPS metrics to measure network performance.
Others have drawn attention to the technical complexity of a single transaction on Cardano.
Does the argument have value?
AMBCrypto assessed the Cardano network via Santiment’s asset valuation metric, NVT Ratio. Compared to Ethereum [ETH]Cardano’s NVT ratio has been on the low side in recent months.
This meant that its market value was lower than the value sent over the network, in other words, an undervalued asset.
Source: Santiment
That said, Cardano’s DeFi growth has lagged well behind its market cap increase.
At the time of writing, its total value (TVL) was just $418 million DeFiLlamasignificantly lower than chains with comparable market capitalization.
Read Cardanos [ADA] Price forecast 2024-25
These findings have led critics to question the network’s potential in building effective decentralized apps (dApps).
Meanwhile, the ADA fell 4.5% over the past 24 hours and was trading at $0.65 at the time of writing, according to CoinMarketCap.