Charles Hoskinson commented that Cardano could have top largest DeFi TVL
Cardano’s foray into the decentralized finance (DeFi) area has been widely seen as a success, despite the fact that the network lacks the total value locked (TVL) required to compete with market giants. However, this is due to the figures used to determine the TVL that is aired to the public.
When it comes to the networks with the highest percentages of staked supply, Cardano is at the top of the list. Cardano sees billions of dollars already staked on the network, with more than 72 percent of the total supply pledged. Unlike most smart contract platforms, staking ADA on the Cardano network does not need the user to lock their assets for any period of time.
Now, Cardano may not be counted as a leader in the DeFi space because these are not calculated in official TVL values, the question is why? Despite the fact that ADA holders can earn rewards for their staked coins, they are free to move their coins whenever they wish. It appears that this does not entitle the staked coins to be counted for calculating a network’s TVL.
Cardano founder Charles Hoskinson highlighted this mismatch in a recent tweet, explaining that if the number of staked ADA were counted regardless of whether they are locked or not, Cardano’s TVL would be substantially greater. Hoskinson said that if this were done, the network’s TVL would be more than $19 billion.
With this figure, it would be the third-largest platform in terms of TVL. According to DeFi Llama statistics, the title is currently held by the Binance Smart Chain, which has a TVL of $12.06 billion. However, because unlocked staked ADA is not considered, the TVL for Cardano on the same platform is slightly more than $200 million.
There are still mixed opinions that weren’t ADA holders bashing someone for mentioning TVL and saying how it is not a good measure of a blockchain? Why is Charles want to increase TVL if it is not important? And what Charles is bringing out here is that other chains’ protocols are bad, their shaky locked staking is inept in comparison to Cardano, if the staking wasn’t so good, ADA staking would count towards TVL too, for example as LIDO does.
An honest answer is that it’s a fact a lot of big investors have internal metrics before investing in a Layer 1 (like a certain amount of TVL, or a certain amount of associated ecosystem projects above $1 billion within the ecosystem, etc). So in practice, a lot of entities are still just sitting on the sidelines watching Cardano’s nascent ecosystem until those metrics are met.
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