The Influence of Legacy Systems on Cryptocurrencies
If you are a crypto enthusiast, you need to be aware of the growing influence of legacy systems from traditional finance on the crypto world. Charles Hoskinson, co-founder of Cardano and Ethereum, recently expressed concern about this issue. He specifically highlighted the dominance of collateral-backed stablecoins in the digital asset market. Here’s what you need to know:
Cardano: Hoskinson’s Warning
- Charles Hoskinson is concerned about the widespread influence of legacy systems on the cryptographic world.
- In a video titled “Legacy is Eating Crypto,” he emphasized the need for the crypto community to reject threats from centralized systems typical of traditional finance.
- He pointed out that stablecoins like USDT and USDC dominate on-chain transactions, covering about 70% of the total market share.
- Hoskinson argued that these stablecoins, being centralized by central control imposed by various international jurisdictions, could negatively impact the future of cryptocurrencies.
- He proposed algorithmic stablecoins governed by on-chain algorithms as a decentralized alternative.
The State of the Cardano Market in 2024
- Cardano’s TVL in Q4 2023 increased by 166% compared to the previous quarter and recorded a +693% on an annual basis.
- However, Cardano’s locked capitals remain small compared to other resources present on various chains like Ethereum, Tron, Solana, BSC, Arbitrum, etc.
- It is ranked 14th on the list of chains with the highest TVL with a total value of $384 million.
- The value of ADA has increased by 127.2% on a quarterly basis but still lags behind Bitcoin and Ethereum.
- The ADA/BTC ratio is lower by about 28%, while the ADA/ETH ratio is depreciating by 14% compared to a year ago.
- Despite this, there are encouraging signals from average daily transactions and active addresses which have been growing.
The Impact and Potential Future Slide
You should be able to participate in markets without fear of censorship and exclusion. This is the foundation of the revolution that cryptocurrencies are, and none of this means anything if we hand over all these things to legacy actors. – Charles Hoskinson
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