Popular New Zealand-based crypto analyst Lark Davis pointed out the three criticisms faced by the Cardano project.
Cardano Is Overvalued
He says that Cardano’s biggest use case right now is staking. The current price of Cardano is based on speculation rather than real demand for the token based on usefulness and need among developers and users.
Right now, the basic economics that will drive future demand are simply not there. Also there’s nothing wrong or unusual about this. This is a fairly normal occurrence. We see that a lot with various assets, where the price of an asset can rise far higher than its value should be based on where it is now simply because of strong support from the market and it’s future predictions.
Even if cardano’s price is overvalued right now does not really mean that it will plunge or go down in the near future. Davis says that in such situations the opposite is likely to happen. The higher the market cap, the more serious an investment it is in the eyes of many investors, which makes the market cap go even higher and become even more serious.
Nothing Is Built on Cardano
According to Lark Davis this statement is not technically true as he feels that few things are built on cardano but it lacks an ecosystem. He also states that it’s an incredibly dishonest critique of Cardano in his opinion because it is hard to have an ecosystem when there’s no smart contract functionality.
“Smart contracts are coming. The testnet is due in late April. Smart contracts are then scheduled to come on the mainnet around August… I think we’ll have at least a few dozen applications by Q1 of next year.“
Cardano Is Too Slow in Its Development
Davis says it’s fair to hope Cardano’s speed of development to pick up pace, especially considering the moderately fast rise of other projects with robust and successful ecosystems such as Elrond (EGLD) and Avalanche (AVAX).
Luckily cardano has a growing community and enthusiastic users who are willing to support the smart contracts from the day one of it’s launch. With such an optimistic community if cardano promises to deliver an ecosystem that mints people money, then it’s obvious for users and developers to eventually join this massive ADA community.
“I personally think that Cardano will prove the haters wrong this year, and that they will deliver a powerful and interesting blockchain that will become a big part of the cryptocurrency ecosystem…“