As the crypto market continues to slide lower, the question of the real value of most cryptocurrencies is coming up more often. That’s because, unlike in 2017 when crypto was the in-thing, and speculation was the primary value driver, things are very different now.
After a year’s drop, fundamentals will play a more integral part in thenext Bull Run. And when it comes to fundamentals, tokenomics is a critical component. That’s because, a blockchain may be adopted, without necessitating the adoption of the token involved. This scenario could stagnate the value growth of most tokens, even though their underlying blockchains will gain mass adoption.
This could be an even bigger problem for utility tokens due to atomic swaps. While atomic swaps will ultimately increase crypto security, by removing the need for centralized exchanges, they also create a risk for utility tokens. That’s because, with atomic swaps, there would be no real need to hold on to utility tokens for long. Anyone looking to run Dapps or execute a smart contract on a platform blockchain can quickly buy the utility token for a shortwhile, then quickly switch to stable coins via atomic swaps. This will significantly reduce the value of most utility tokens, and disappoint investors.
One utility token that will survive this, and thrive, is Cardano (ADA). On top of being the fuel for Dapps on the Cardano blockchain, Cardano will also have staking. This will be a major incentive for most people to buy and hold Cardano (ADA), as a way to earn a passive income. They will hold it for the same reason that people are willing to put money in a bank and earn interest, no matter how small.
The idea of a passive income is always attractive to most investors. The only difference between Cardano staking and a bank fixed account is that Cardano (ADA) offers the possibility of a huge speculative wave that could push its value way past its all-time highs. This will be a major incentive for most investors and will play a role in the long-term value of Cardano (ADA). Besides, the IOHK team is working on making Cardano staking easy for the average Joe. As more people get to learn about the earnings possibilities of staking Cardano(ADA), demand will rise. This will make Cardano (ADA) a top blockchain to invest in, and a possible source of value growth in the long-haul.
With this lower risk relative to other utility tokens, Cardano(ADA) is highly undervalued at current prices. This is a crypto that is down by over 90% from its all-time highs. That’s in spite of the massive progress that the Cardano team has made on their roadmap. As more investors get to learn of what Cardano can do, and the benefits that come with staking it, it could experience significant buying pressure that will see its value rise over time. The moment Cardano staking becomes a thing, Cardano could quickly rise to a $1 or more. It’s definitely a high potential crypto at current prices.