Cardano Q3, 2023: Advancements in Interoperability and Ecosystem Growth

Interoperability Pursuit with PolkadotSDK:

• Cardano, under the guidance of Ethereum Co-Founders Charles Hoskinson and Gavin Wood, is actively enhancing interoperability through the integration of Polkadot's software development kit (PolkadotSDK).
• This collaboration focuses on uniting the communities of DOT and ADA by exploring Polkadot's framework, especially its substrate, to create interconnected partner chains within the Cardano ecosystem.
• The strategic move towards sidechains aims to boost scalability and facilitate interoperability among specialized blockchains, with Cardano opting for PolkadotSDK's battle-tested tech stack after four years of research.

Ecosystem Developments:

• The inaugural adopter of these partner chains, Midnight, reflects a broader trend seen in projects like Avail and Madara Starknet, indicating the growing appeal of PolkadotSDK in the blockchain space.
• PolkadotSDK's selection is driven by its consensus mechanisms, BABE and GRANDPA, addressing a common challenge in consensus models. Polkadot's multi-chain vision, developed over five years, positions it favorably against Ethereum.
• Polkadot introduces XCM (Cross-Chain Message Passing) to address unique standards and formats across chains, facilitating seamless communication and mutual understanding among all PolkadotSDK chains.

Cardano Summit 2023 and Framework Unveiling:

• At the Cardano Summit 2023, Charles Hoskinson introduced a framework empowering developers and validators to leverage Cardano's core strengths. The design includes a clear separation between the Settlement Layer and Computation Layer, marking a significant advancement in Cardano's pursuit of heightened interoperability and collaboration with PolkadotSDK.

Financial Overview and Network Analysis:

• Despite a flat QoQ performance, Cardano's Total Value Locked (TVL) witnessed a substantial 198% YTD growth, ranking 15th across all networks.
• Stablecoins on Cardano experienced a notable 16% QoQ increase, with bridged versions of USDT and USDC introduced in Q3.
• Project Catalyst Fund10, with a pool of 50 million ADA, provided financial support to 192 projects within the ecosystem.
• The Voltaire governance phase continued its upward trajectory, marked by the successful launch of SanchoNet and Intersect, adding significant value to the platform.

Staking and Ecosystem Analysis:

• Staking remained stable, with 2,036 unique stake pool operators and the top 197 pools accounting for over 50% of the 22.9 billion total staked ADA.
• Dapp transactions decreased by 14.7% QoQ, but overall, they were up 40.0% YTD. NFT transaction activity declined for the third consecutive quarter, down 3.0% in Q3.
• The TVL ranking among all networks increased from 21st to 15th in Q3, despite a 0.1% QoQ decline in TVL.

DeFi, Sidechains, and Innovations:

• DeFi TVL remained steady, declining by 0.1% QoQ. The introduction of two new stablecoins, iUSD and DJED, contributed to a 16.3% QoQ growth in Cardano's stablecoin market cap.
• Cardano boasts several sidechains, including Milkomeda C1, Wanchain, Midnight, and World Mobile.
• Hydra V0.12.0, a scaling protocol, was released in Q3, introducing off-chain mini ledgers and new applications like gaming and auctions.

Development and Growth:

• IOG Academy provided open courses and technical guides for development with Marlowe, Haskell, and Plutus.
• Wanchain connected Cardano to top networks, and Milkomeda made EVM contracts accessible directly from Cardano wallets.
• DeFi is expected to benefit from new infrastructure, with increased liquidity and boosted activity in 2023.