The Cardano ($ADA) blockchain has experienced a 67% increase in the deployment of smart contracts. In just the first 11 days of February, the network saw nearly half as many new smart contracts as the entirety of 2023, totalling approximately 5,000.
Notably, Plutus V2 scripts, which are essential for validating actions on the Cardano blockchain, have experienced significant growth, outpacing Plutus V1 scripts. By February 11, the count of V2 scripts escalated to 23,896 from 18,859, while V1 scripts saw a modest rise to 6,400 from 6,356.
This surge has been said to signify a growing confidence among developers and projects in leveraging Cardano’s blockchain for creating decentralised applications (dApps).
The increase in Cardano smart contracts is coinciding with a significant surge in decentralised finance (DeFi) activity on the blockchain. Cardano’s total value locked (TVL) is up 5% over the previous 24-hours and 11% in the past week, according to DeFi Llama. Similarly, the native token ADA has climbed by 12% over the past seven days.
Upcoming governance model upgrade
The surge in smart contracts comes as Cardano is preparing for a major upgrade to its protocol, introducing a minimal viable on-chain governance model. This new system will allow any Cardano user to submit a governance action.
It will also establish three distinct governance bodies: a constitutional committee, a group of delegated representatives (DReps), and the stake pool operators (SPOs).
For a governance action to be ratified, it must receive approval from at least two of these bodies through on-chain votes, depending on the action type and the current state of the governance system.
ADA’s price activity
Cardano’s native cryptocurrency ADA has started showing positive price movements, in line with the smart contract news and the current bullish market. ADA is up 3% over the past day and 12% in the previous week.
However, not all are convinced about Cardano’s future. Tom Dunleavy, Partner and Chief Investment Officer (CIO) at MV Capital, has voiced concerns about Cardano’s future, pointing to the absence of critical ecosystem components such as a stablecoin and a robust DeFi ecosystem. These shortcomings are attributed to what Dunleavy sees as inherent limitations in Cardano’s protocol design and a resistance to change among its leadership, potentially stifling innovation and growth.
Similarly, Bitcoin enthusiast and advisor to El Salvador’s President Nayib Bukele Max Keiser predicts a bleak future for ADA, suggesting it is on a downward trajectory.
Despite these criticisms, price analysis indicates that ADA is forming a descending triangle chart pattern, with some experts predicting a potential rally of approximately 32%.
