Cardano Now Third-Largest Cryptocurrency by Market Cap

Cardano (listed as ADA) has become the third-largest cryptocurrency by market capitalization as it is just weeks away from its planned hard fork that will bring smart contracts to the platform. 

The token was priced at $2.02 as of 2 p.m. eastern time Friday, according to CoinGecko, bringing its market cap to more than $64 billion. ADA’s price was up about 16% from the previous day and up 46% from the previous week, the data shows.

ADA’s market cap, which is below only bitcoin and Ethereum, is now slightly above Binance Coin (BNB) and Tether (USDT).

The boost in price comes as proof-of-stake blockchain platform Cardano gets set to execute an upgrade on its main network. The hard fork is set to occur on Sept. 12, Cardano executives revealed in a YouTube video on Friday morning.

“As we come up to this hard fork, we will deliver the Plutus capability — our full toolbox of smart contract capability — and then we’ll start to iterate from there,” said Nigel Hemsley, Cardano’s head of delivery. “It gives us the foundation to build on Cardano. We’ll have more and more [decentralized applications] and other innovations coming out shortly afterwards.” 

Plutus is Cardano’s platform for smart contracts, which are contracts stored on a blockchain that are executed when predetermined conditions are met. To write a smart contract using the platform, one can code directly in what is called the Plutus Playground.

Founded in 2015 by Ethereum co-founder Charles Hoskinson, Cardano’s price accelerated as the rise of DeFi in 2020 caused congestion on the Ethereum protocol, creating incentives for developers to build alternatives. Though now worth more than $2, a Cardano token was worth 10 cents in late 2020.

David Tawil, president of ProChain Capital, called the hard fork and smart contract update “critical,” noting that Ethereum is now seeing more competition. 

“If there is a major uptick in adoption, investors will be justified in a valuation of Cardano that is similar or equal to Ethereum now that the functionality will be the same or better,” he told Blockworks. 

Though smart contracts overall are still in the early stages of development, they will continue to be perfected over time, Tawil said. 

“We’re lucky to have very smart and ambitious competitors focused on the product,” he noted. “These participants will continue to sharpen each other; it is capitalism in the truest sense … [and] regulators should hang back and allow animal spirits to run.”

Cardano launched a public testnet about a week ago, Hemsley noted, which will allow 500 community members to work with smart contracts on the network before the upgrade. It plans to hard fork the testnet on Sept. 1.

“We have components, we’ve got dependencies, we’ve got implementations going on [and] we’ve got different testing routines that we’ve got to perform across the end-to-end stack,” he said in the video. “This period of stability we’ll have on the Cardano testnet is very important to us to make sure that we get the confidence that we’re ready to hard fork the main net, and we haven’t found any potential catastrophic issues.”

The testing stage is also a way for exchanges to test their set-up in a pre-production environment. So far, 140 exchanges have listed ADA on their marketplace, Hemsley said, and getting them on board ahead of the hard fork is crucial for liquidity purposes.

“The best thing of course is all of this additional functionality, all of the new [decentralized applications] that people are going to be writing won’t require another hard fork,” Kevin Hammond, a software engineer working with Cardano, said in the Friday video. “We will be in a situation where people can develop the DeFi applications that they want to.”

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