- Cardano’s ADA was among the tokens listed by the SEC as an unregistered security in recent enforcement actions.
- In the wake of this, the network’s TVL has sharply declined.
- Despite this decline, there are signs that network users are not discouraged.
Over the past week, the United States Securities and Exchange Commission rocked the crypto markets with enforcement actions against two of the world’s largest crypto exchanges by trading volume, labeling several crypto assets as unregistered securities, including Cardano’s ADA.
In the fallout of this, investors are exiting several crypto ecosystems. At face value, this also appears to be the case for the Cardano network, which has seen a significant drop in its decentralized finance (DeFi) Total Value Locked (TVL) since the SEC filed its lawsuit against Binance.
Cardano’s TVL Sheds $50 Million
DeFi Llama data shows that Cardano’s TVL has declined by about $50 million since June 5, dropping from about $183.06 million, its highest point since May 2022, to $133.18 million at the time of writing.
This $50 million loss has notably been shared by the network’s top DeFi apps, which recorded double-digit percentage losses in TVL in the past week.
However, This decline in TVL does not paint the whole picture, as other metrics show signs of resilience.
Cardano DeFi Activity Perseveres
For one, the number of active users on the network has not been impacted since the SEC lawsuit against Binance labeled ADA a security. On the contrary, in the wake of the lawsuit, the number of active users on the network at one point spiked to levels last seen in February.
At the same time, the TVL continues to rise in terms of ADA and is at a new all-time high with over 507 million ADA. It represents a 250% increase since the start of the year.
As Cardano content creator Sooraj K Saju highlighted, this is a notable achievement as other popular networks like Ethereum, Solana, and Avalanche have been experiencing an extended decline in this metric.
Cardano’s continued resilience comes from continued improvements to the network, including the launch of Hydra, its highly anticipated scalability solution, in May. Hydra was touted to take the Cardano network beyond Bitcoin, but this remains to be seen and is unlikely, given current market conditions.
On the Flipside
- At the time of writing, the price of ADA is down 6.93% in the last 24 hours.
- Cardano’s TVL is still up nearly 300% since the start of 2023.
Why This Matters
Cardano’s resilience in the face of declining prices and a tanking TVL suggests that users are unfazed by the SEC’s claims.
Read this to learn more about Cardano’s TVL growth in 2023:
Learn more about BNB’s recent surge and the controversial circumstances surrounding it: