Cardano Nears $681.9 Million Milestone in Decentralization Phase

The Cardano analysis platform TapTools has identified a strategic move that highlights Cardano’s relentless commitment to decentralization and participatory governance. According to a snapshot captured by TapTools, Cardano’s treasury, which holds ADA tokens valued at nearly $681.9 million, is approaching a significant milestone as control over the treasury is set to be transferred to the community.

Experts believe that the structure of the Cardano ecosystem is one of the primary pillars for the project’s future sustainability. The decision to transfer control to the community is a crucial part of its development, grounded in the concept of decentralization. Unlike other blockchain protocols, whose treasuries contain a mix of stablecoins and other digital assets like Bitcoin and Ethereum, Cardano’s treasury is comprised solely of ADA tokens.

Observers attribute the growing reserves in the treasury to an increase in network activity. According to our research, the treasury is used to incentivize application growth within the ecosystem. Additionally, the accumulated funds come from transaction fees and are part of the block reward. It is essential to note that Cardano operates under a three-tier governance system. At the top is the Cardano Foundation, which focuses on platform development and marketing. Input Output Global (IOG), also known as IOHK, handles the research and development initiatives for Cardano, while EMURGO oversees ongoing operational activities.

Implications of the Cardano Initiative

Experts consider Cardano’s focus on financial decentralization a breakthrough in the blockchain space, setting a precedent for other projects and emphasizing the importance of community-centred fund management.

Interestingly, this development coincides with the increasing anticipation of the upcoming Chang-Hardfork, which is expected to complete the decentralization process. According to Cardano founder Charles Hoskinson, the Voltaire era will cement community governance and address concerns about the future of the blockchain.

The Cardano community’s initiative promotes active participation and democratic decision-making. However, ADA is currently facing a significant price decline after falling below the 20-day Exponential Moving Average (EMA) last week. At this point, the price dropped by 10%, settling at $0.41, with no movement observed by the time of publication. Over the past seven days, ADA has fallen by 6%, and over the past 30 days, it has decreased by 14%.

The drop below the 20-day EMA indicates a substantial decrease in buying pressure and a notable increase in selling pressure. An analysis of ADA’s daily transaction volume using the seven-day moving average shows a profit/loss ratio of 1.01. According to data from IntoTheBlock, 3.04 million addresses – 68.06% of ADA investors – hold the asset at prices above the current market value. This means that only 30.38% of ADA holders are in profit.