Cardano’s DeFi TVL rose 172% in Q1 amid significant ecosystem growth: Messari

Cardano’s DeFi TVL rose 172% in Q1 amid significant ecosystem growth: Messari

By Benson Toti - min read
  • Cardano TVL increased 172% QoQ, from $50.8 million in Q4, 2022 to $138.3 million in Q1.
  • Indigo and Djed stablecoins catalysed overall growth in Cardano’s TVL, with 72% and 27% volume spike respectively.
  • ADA price also rose in Q1, rising by 54% amid a broader bull rally for cryptocurrencies.

Cardano, currently the seventh-largest crypto network by market cap, had a significantly positive first three months of the year.

Insights for the Cardano ecosystem for Q1 that crypto market research platform Messari shared on Tuesday shows that the proof-of-stake blockchain network recorded significant increases in both financial and ecosystem metrics over the quarter.

In particular, Messari says in its State of Cardano Q1 2023 report that the ADA network’s market cap and total value locked (TVL) in DeFi saw substantial bumps. The growth came as Cardano saw increased adoption for new stablecoins amid notable technical developments around network scalability and VM compatibility.

Among the key developments was the deployment of multiple layer-2 solutions on the Cardano mainnet. Also notable was the increase in sidechains that continue to bolster cross-chain compatibility.

It is notable however that Cardano saw decreases in new addresses (by 71.5%) and in average daily transactions (by 10.6%) QoQ. Daily NFT transactions on the network also fell in Q1, declining by 27% as daily unique buyers shrunk by 23%

Cardano’s DeFi TVL grew 172% in Q1, 2023

An ecosystem overview of Cardano shows DeFi TVL increased 172% quarter on quarter, jumping from $50.8 million in Q4 2022 to $138.3 million at the end of Q1, 2023. DeFiLlama data shows Cardano’s DeFi TVL has increased 39% in the past month to $171.28 million, with stables accounting for over $12 million.

According to Messari, the increase in Q1 was primarily driven by broader growth across established ecosystem protocols like MinSwap, and greater adoption for newer protocols and stablecoins. This included TVL growth for ADA-backed stablecoin protocol Djed, synthetic assets and stablecoins issuer Indigo and Cardano-based borrowing and lending protocol Liqwid Finance.

Stablecoin volume on Cardano grew 261% QoQ, faster than overall TVL

As noted above, stablecoin volume on Cardano exploded in Q1 and grew at a faster rate than the network’s overall TVL. Although there are three stablecoins live on Cardano – Sharelake’s RUSD, Indigo’s IUSD and Djed’s DJED – the largest amount of volume was from just two.

Indeed, Indigo’s IUSD and Djed’s DJED helped push overall stablecoin value in the Cardano ecosystem up by 261%, from $2.8 milllion in Q4 to $10 million at the end of Q1. This was as a result of IUSD volume growing 72% in the quarter, while DJED saw a 27% increase. RUSD’s volume dominance was less than 1%.

Increased interest in the newer protocols saw the dominance of leading DEXs such as Minswap, SundaeSwap and WingRiders decrease over Q1, Sheehan noted in the report.

ADA price rose 54% in Q1 amid growth in other financial metrics

In terms of price action, data shows Cardano’s native coin had its value up by 54% in Q1, with ADA price mirroring the broader market uptrend in Q1, 2023. As of 18 April 2023, Cardano price was at $0.44, up more than 30% in the past month and over 77% higher year-to-date.

Meanwhile, Cardano’s treasury balance grew by 100 million ADA to 1.21 billion. Growth value in terms of ADA and USD was 9.1% and 66% QoQ respectively. The treasury balance in USD terms rose from $278 million to $460 million.