Category: K33 research

K33 Research, a prominent entity in the cryptocurrency research sector, has released a scathing report on Cardano (ADA), sparking widespread discussion in the crypto community. The report bluntly advises investors to divest from Cardano, citing a lack of meaningful use for its native token, ADA.

Sell All ADA Now?

In a detailed examination, K33 Research asserts that the Cardano network suffers from a significant lack of practical application, which is essential for the inherent value of its native token. The report states, “A smart contract network needs meaningful use for its native token to have any value. The Cardano network, however, has no meaningful use or any credible track to get it.”

Addressing the counterargument often presented by Cardano supporters regarding the network’s daily transactions averaging around 90,000, the report argues that these do not equate to meaningful blockchain activity. The report further elaborates, “There’s nothing else going on in the Cardano Network than exchange transfers and a group of bagholders fabricating blockchain activity.”

K33 Research highlights the absence of external evidence supporting any significant activity on the Cardano network, contrasting it with other protocols where real activity is corroborated by external proofs. This lack of external validation is termed as ‘proof by contradiction’ by the research firm.

One of the most telling indicators of inactivity, according to the report, is the situation of stablecoins on the Cardano network. K33 Research points out that the absence of major stablecoins like USDT and USDC on Cardano is a clear indicator that no meaningful decentralized finance (DeFi) activities are taking place. The only stablecoins present are reportedly Cardano-collateralized and valued at 76 cents to the dollar, which it refers to as “another word for nothing.”

Future Outlook For Cardano

K33 Research is pessimistic about Cardano’s future, drawing parallels with other blockchain projects that started with no traction and later faded into irrelevance. The report notes that successful blockchains evolve over time, whereas “creationistic, grand idea, subsidized bootstrapping, and no real use-blockchains” eventually lose their luster. It cites examples like IOTA, NEO, and EOS to illustrate this pattern.

Despite Cardano’s current market valuation of $19 billion, K33 Research attributes this to its availability on various exchanges and its appeal to new crypto investors. The report critiques the narrative surrounding Cardano, describing it as “scientific mumbo-jumbo” that might mislead newcomers.

“Ada is a well-established coin that is tradeable ‘everywhere’, also on smaller local exchanges, making it one of the coins that are ‘pushed’ to aspiring crypto investors. Cardano also has an enticing story for newcomers, with Cardano being branded as ‘the peer-reviewed research-driven blockchain network’,” the report mentions.

However, K33 Research foresees a decline in this allure, predicting that the number of new investors attracted to Cardano will dwindle. Moreover, K33 Research casts doubt on the long-term viability of ADA, citing a lack of rally in its price compared to other strong smart contract tokens during recent market rallies.

“Ada has not rallied in line with other ‘stronger’ smart contract tokens when markets have improved,” the report states, suggesting a gradual fade from relevance rather than an abrupt disappearance.

According to K33 Research, the market doesn’t rapidly eliminate such coins but instead “bleeds them out” over time. The report concludes, “Things never happen overnight, and these processes often take years to play out fully. Still, all price signals also point to Ada gradually disappearing from the crypto map.”

At press time, ADA traded at $0.531.