Cardano's decentralized finances were not the strongest part of the ecosystem, as it only began delivering convenient decentralized solutions by the second half of last year. Such a tendency was tied to the underlying technology of transaction bookkeeping on the network. However, things might drastically change in 2023.
The current TVL on the network is at $50 million, down significantly from the ATH reached back in 2022, when the total value of assets on the network stayed at $350 million. Considering the lack of variety in decentralized solutions in Cardano's ecosystem, such a high number is surprising.
In the new year, the Cardano network will release a whole series of algorithmic stablecoins that should bring way more value to the network than decentralized exchanges or yield farming platforms, considering the convenience they bring to networks and DeFis.
In case of market recovery in 2023, the TVL of Cardano might reach new highs, easily beating the relatively insignificant $350 million we saw in 2022. In comparison, Solana's TVL broke the $1 billion mark back in July 2021 and reached the highest value of locked funds on the network in November, exceeding the $10 billion mark.
Obviously, the current amount of locked funds is not going to push Cardano as an ecosystem to new highs, which is why developers are betting heavily on the DeFi sector as one of the main and easiest ways to attract fresh capital to the network.
At press time, ADA is still struggling on the market, moving in a prolonged downtrend despite the good end of 2022 and beginning of 2023. The lack of inflows to the cryptocurrency market and the stalemate of the DeFi and NFT industries led to the decline of ADA in 2022 and will remain the main source of pressure for the coin in 2023.