ADA Falls as Cardano’s Smart Contracts Hit Roadblock
The price of Cardano’s native token ADA failed to continue its rally and is now down by almost 15% from its all-time high, reached five days ago as reports have been circulating about users being unable to make swaps on the first-ever decentralized exchange (DEX) built on Cardano’s “Plutus” smart contract platform.
At 09:45 UTC, ADA, ranked 3rd by market capitalization, was down by more than 9% over the past 24 hours to trade at a price of USD 2.63. Today’s drop also means that ADA is now in the red over the past 7 days, with a drop of almost 4%. However, the price remains up nearly 78% for the month, by far outperforming its smart contract competitor Ethereum (ETH), as ETH rose by 19% over the same period.
Other cryptoassets from the top 10 list are down 2%-9% today.
ADA price chart:
Despite early excitement surrounding Cardano’s smart contract-enabling “Alonzo” upgrade, a number of users have reported problems with using the first decentralized exchange on the platform, Minswap.
Quick to comment on the issues were several figures in the Ethereum community, with for instance Anthony Sassano, writer of The Daily Gwei newsletter, sharing screenshots of discussions between Cardano community members while commenting that “ADA fanboys are finally discovering that you can’t peer review your way out of fundamental issues.”
The first dapp went live on Cardano today and ADA fanboys are finally discovering that you can't peer review your way out of fundamental issues. pic.twitter.com/tYQXNcVKGN— sassal.eth 🦇🔊 (@sassal0x) September 4, 2021
According to the screenshots, taken from the r/Cardano subreddit, one user claimed he was unable to make any swaps on the DEX. To this, others replied that it is due to “a fundamental issue” with Cardano, and that the UTXO (unspent transaction output) model the blockchain uses “can only handle one transaction per block.”
Meanwhile, in an attempt to refute some of the allegations that have been made against the platform, Cardano development firm Input Output also took to Twitter to publish a thread on Sunday where it took aim at what it called “outright FUD and misinformation” surrounding Cardano’s smart contract functionality:
IMPORTANT THREAD: Over the past 24 hours we have seen a lot of social media speculation (and let's face it, outright FUD & misinformation) over Cardano’s ledger approach and specifically ‘concurrency’. Let’s clear this up. #Cardano $ADA 1/n— Input Output (@InputOutputHK) September 5, 2021
“And to be clear, dapps [decentralized applications] are NOT limited to 1 transaction per block. By designing your service or application with multiple UTxOs, you can enforce more parallelism. This is inherent and – we believe – one of the advantages to eUTxO design as we have implemented it in #Plutus,” Input Output wrote about the allegations that had been made against the platform.
The public testing phase for the DEX has now been halted, and users who try to open Minswap are met with a page saying that the team has had to “shut down our testnet temporarily,” and that a post-mortem report and a proposed scaling solution will be published “in the next few days.”
@zhusu had a perfect bullcase thesis that for in a tweet, can't find it though.— notsofast (@notsofast) September 6, 2021
Ada is the anti-macro, pure narrative retail pumpcoin play. Never actually achieving use is a feature. You can't sell the news if it's always coming tomorrow
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