Is Cardano The Most Expensive Smart Contracts Blockchain? Critic Bearish on ADA
Cardano, one critic argues, is the most expensive smart contracts platform in the world, even exceeding Ethereum. He remains bearish on ADA due to these high costs.
Surprisingly, in the 2024 United States general election, pitting Donald Trump and Kamala Harris revolves around the government’s acceptance of crypto, among other pertinent issues.
There are issues of tech, inflation, the economy, the state of the labor markets, China, immigration, and many other factors. Still, crypto is one of the most critical topics in discussions.
This goes on to show that crypto adoption is inevitable. In the future, a big part of the digital economy will rely on the underlying tech: blockchain.
There must be regulations in place to guide and foster growth and innovation.
To win, Harris and Trump are wooing the masses with pro-crypto legislation.
With Adoption Comes The Fee Problem: Critic Takes Issue With Cardano
The problem is that with adoption, existing blockchains must level up. They must be scalable but also cheaper to transact on.
For years, crypto users have complained that Ethereum is the most expensive smart contracts platform, explaining the explosion of alternative solutions and layer-2s like Base.
Even so, in a recent post on Reddit, one observer argued that Cardano, a peer-reviewed smart contracts platform, could be, after all, the most expensive to use, considering its humongous fees.
In his view, Cardano, not Ethereum, is the MOST EXPENSIVE smart contracts platform to deploy smart contracts or transfer tokens.
The high fees are despite Cardano having 10X fewer active daily wallets, nearly 400X less DEX trading volume, and significantly lower transaction processing fees.
Based on his assessment, Cardano has a minimum transaction fee of roughly 0.17 ADA or nearly $0.60 at spot rates. On Ethereum, the minimum gas fees stand at around $0.03, or 50% less.
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Meanwhile, swapping on-chain on Ethereum via Uniswap and other protocols would offset the trader $0.32. On Cardano, this is higher, standing at around $0.45.
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The analyst said the higher fees are one reason his outlook on ADA, Cardano’s native currency, will be bearish.
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The Scaling Concern: Is This Security Model Sustainable?
Beyond the fee factor, the observer lambasts Cardano for the low transaction processing speed, currently at 0.4. Though it can rise to 18 TPS, the architecture adopted by Cardano developers enabling transactions within transactions contributes to the low TPS.
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Additionally, the critics said Cardano’s security budget, primarily funded by the 99.5% inflation with only a 0.5% transaction fee, is problematic.
He added that with this model, even with full blocks, Cardano might not be economically sustainable in the long term.
Even so, one Cardano supporter refuted the argument, adding that even if the treasury fund depletes, the network’s security will be derived from transaction fees, which are projected to increase over the years.
Cardano’s Chang Hard Fork And Hydra
Amid this criticism, Cardano continues to build. After the Chang hard fork, governance will be decentralized. ADA holders will vote on proposals to gradually improve the platform.
Moreover, developers are refining Hydra, a layer-2 scaling solution set to further scale the mainnet.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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