30 reasons from the Messari report

Cardano’s market cap, technical innovations, and community size are often under-reported in mainstream crypto news. However, a December 2022 Messari report makes clear that Cardano is the blockchain industry’s sleeping giant.

Here are 30 reasons extracted from this report that will convince value investors and long-game builders to take a closer look at Cardano in 2023.

They’re broken down into the following categories:

1. Market and community confidence
2. True decentralization and Proof-of-Stake
3. Sound engineering and sustainable development
4. eUTXO is more secure than the EVM account-based model
5. Native tokens
6. Sidechains and EVM integration

1. Cardano’s native ADA token has long been in the top 10 cryptocurrencies by market capitalization.

2. Cardano is the third-largest, smart-contract capable L1 blockchain in market cap, after Ethereum and Binance Coin. Cardano is larger than all other competing L1 smart contract networks including Polygon, Polkadot, Tron, Solana, Avalanche, Algorand, or Near.

3. After Bitcoin and Ethereum, Cardano hosts the blockchain industry’s largest, most active and loyal community, boasting millions of unique ADA holders.

4. Cardano has a particularly large social media presence, e.g. 1.3 million Twitter followers, 690k Reddit members.

5. Cardano attracts a higher than average share of builders using blockchain for real world utility and social impact. This “RealFi” movement is well positioned to be the catalyst that moves the entire industry out of the current crypto winter.

6. Cardano is truly decentralized via a network of over 3000 stakepool validators that are responsible for block production. The protocol has strict controls to mitigate stakepool saturation and Sybil attacks.

7. Proof-of-stake is a greener, more energy-efficient alternative to first generation Proof-of-Work protocols like Bitcoin.

8. Cardano has been paying staking rewards to ADA holders every five days for over two years. Delegators retain full custody and control of their (unlocked) stake.

9. Delegators average a 4–6% return per annum on their staked ADA.

10. Rather than relying on the operator for distribution, the Cardano protocol guarantees that every delegator receives rewards.

11. Stake pool operators / validators are aware of which slots they lead ahead of time, but other validators are not. Additionally, no users know in advance how many slot leaders each slot will have. This adds a layer of security as it prevents DDOS attacks on slot leaders.

12. A fixed 20% of Cardano transaction fees goes into its treasury rather than being fully distributed to stakers. This treasury share can be adjusted through the governance process and is used to support sustainable development and maintenance of the Cardano technology.

13. Progress on Cardano has been deliberate and heavily tested along the way.

14. Cardano’s Ouroboros Proof of Stake consensus mechanism was developed through peer-reviewed academic research and has been adopted by other networks like Polkadot.

15. Ouroboros splits the functions of computation and settlement into separate layers to maximize performance. Each can be updated independently, which contributes to sustainable development.

16. Cardano has stayed true to its methodical and sometimes slow approach to development, prioritizing academic peer review and well-tested software primitives over the “move fast and break things” philosophy that underpins many competing networks.

17. Cardano has never skipped a block or had to reboot since its launch five years ago. It has never needed a network shutdown during protocol upgrades.

18. Cardano’s academic approach to engineering and deployment has attracted a diverse community of founders and developers with extensive career experience who have carefully evaluated L1 options for building their mission-critical infrastructure.

19. The Cardano treasury administers several rounds of multi-million dollar development grants per year to founders, projects, and protocol developers to grow its ecosystem. The grants are awarded as a result of votes from ADA holders via a decentralized funding and governance mechanism called Project Catalyst.

20. Cardano implements an Unspent Transaction Output (UTXO) blockchain design. In the UTXO accounting model, like that introduced by Bitcoin, assets are stored on the ledger as a directed acyclic graph (DAG) between addresses. In a transaction, those unspent outputs are consumed to create new outputs.

Cardano uses a novel version of UTXO called the extended UTXO (eUTXO) which adds a datum and script to the basic UTXO model, thereby allowing for arbitrary logic and metadata to be attached to each individual transaction (e.g. smart contracts).

21. Cardano’s eUTXO model does not add and subtract transactions from addresses stored in a database of network state which prevents the types of attacks on shared state data that are common in Ethereum, Solana, and other EVM chains that use the account model.

22. Cardano’s eUTX model allows for cheaper transaction verification. No fees are needed for the memory cost of tracking the accumulated chain state.

23. Cardano allows for reduced data storage requirements for its validator nodes because a state tree of all account balances does not need to be kept by each node as required by the account-based model.

24. Cardano’s transaction outputs rely on outputs from previous transactions, forcing a level of atomicity and determinism. This means the cost and validity of transactions can be predicted prior to execution as there is no arbitrary ordering based on a gas variable.

25. Cardano’s eUTXO transactions can be processed in parallel allowing for more scalable use cases. Developers often batch their transactions to allow simultaneous UTXO interactions within the same block.

26. Several recent Cardano Improvement Proposals (CIPs) have eliminated concurrency issues by introducing protocol changes (reference inputs, inline datum, reference scripts) that allow multiple smart contract scripts to access UTXO datum and scripts at the same time.

27. Cardano has native multi-asset support. All fungible tokens and non-fungible tokens (NFTs) are managed via the core L1 protocol and share all the functionality that ADA has.

28. Minting and transferring NFTs and L2 tokens securely on Cardano is a trivial task as they are all native tokens. Unlike ERC-20 tokens, their security and durability are not reliant on heterogenous smart contracts and the professionalism of their developers.

29. The eUTXO model allows for multiple tokens of different types to be transferred together in a single transaction.

30. Cardano has an EVM compatible sidechain as well as a native L2 sidechain protocol called Hydra that is based on isomorphic state channels and optimistic settlement which allows for even faster transaction speeds and lower transaction costs.