Cardano News Update: Cardano’s Ambitious Scalability Stuck in a Liquidity Dilemma

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Cardano News Update: Cardano’s Ambitious Scalability Stuck in a Liquidity Dilemma

Bitget-RWA2025/11/02 01:10

By:Bitget-RWA

- Charles Hoskinson advances Cardano's scalable vision via extended-UTxO model and Ouroboros Phalanx upgrade, targeting 30% faster transactions and enhanced security. - Despite 1.3M active ADA stakers holding $15B, Cardano struggles with low TVL and DeFi adoption, creating liquidity challenges that deter partnerships and growth. - Midterm roadmap prioritizes Bitcoin interoperability through Midnight privacy sidechain and RealFi microfinance platform to enable cross-chain DeFi and real-world asset integrati

Cardano's enhanced UTxO framework and forthcoming updates are generating buzz as founder Charles Hoskinson steers the blockchain toward greater scalability. Input Output, the organization responsible for

Cardano

, has recently revealed the Ouroboros Phalanx upgrade, designed to strengthen network defenses and boost transaction throughput by as much as 30%, based on a

TradingView report

. This initiative fits into Hoskinson’s larger strategy to tackle scalability issues and foster integration with Bitcoin’s DeFi landscape.

Hoskinson has been criticized for Cardano’s comparatively modest total value locked (TVL) and slower DeFi growth relative to competitors like

Ethereum

and

Solana

. In a recent address, he admitted to this disparity but contended that conventional indicators overlook the platform’s robust governance and active user community. He pointed out that Cardano boasts 1.3 million users participating in staking or governance, collectively managing over $15 billion in

ADA

, as reported by a

Yahoo Finance article

. Nevertheless, the majority of ADA holders are not actively involved, resulting in a “chicken-and-egg” scenario where limited liquidity discourages new collaborations and broader adoption, a challenge highlighted in a

BeInCrypto piece

To address this, Hoskinson has proposed a long-term plan focused on

Bitcoin

compatibility and integration with traditional finance. Notable projects include the Midnight privacy-oriented sidechain and RealFi, a microfinance initiative aimed at African economies. These efforts are intended to facilitate cross-chain lending, stablecoin swaps, and DeFi products backed by real-world assets, as detailed in the Yahoo Finance article. Hoskinson emphasized that simply adding major stablecoins such as

USDT

USDC

would not resolve Cardano’s underlying challenges, noting the presence of strong native options like

USDM

and USDA, a point also mentioned in the BeInCrypto piece.

On the technical front, Cardano’s extended-UTxO ledger and Plutus smart contracts enable predictable transaction simulations, supporting user intent-driven workflows. Hoskinson referred to this as the next step for crypto, where users specify their goals (such as making a purchase) and automated systems manage execution across different blockchains, as outlined in

The Coin Republic article

. The Coin Republic article also highlighted that three upgrades from the Vasil era—reference inputs, inline datums, and reference scripts—streamline intent execution, paving the way for more efficient batch processing on decentralized exchanges.

From a market perspective, analysts believe ADA could surpass the $0.80 mark, with some forecasting a rise to $1.70 if momentum continues. Since early 2025, the token has been consolidating within a symmetrical triangle, with support levels between $0.58 and $0.67, according to The Coin Republic piece.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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