In the crypto world, there is always a type of asset that is full of controversy. In the eyes of outsiders, it is a balloon with gorgeous packaging, slow development, and a false reputation, but it can always convince you with its exaggerated K-line rise.
I call it demon coin.
For example, Cardano (ADA).
On August 3, its market value was US$41.6 billion, ranking fifth, and it has skyrocketed 66 times from its low point in March last year.
Those who love it regard it as a belief, while those who hate it say it is a scam: a project that has been developed for 15 years and still has no smart contracts, how can it have a market value of tens of billions of dollars?
What is the truth behind the fog? We try to review the birth and growth process of Cardano and explore how the demon coin ADA was created?
Birth
When talking about Cardano, we cannot forget its founder Charles Hoskinson.
In 2011, Charles became one of the earliest Bitcoin miners when the price of Bitcoin was only $1. By 2013, the price of Bitcoin soared to more than $250. Charles immediately quit his job and devoted himself to the blockchain industry.
In order to let more people understand Bitcoin, Charles established a Bitcoin science project, promoting and popularizing knowledge about cryptocurrencies and blockchain while looking for his career direction.
At that time, two roads diverged in front of Charles.
A Chinese entrepreneur offered $500,000 to build a stablecoin. At that time, Tether (USDT) had not yet been born.
The other path was to work with Dan Larimer (BM), the then founder of BitShares, to jointly create the first decentralized cryptocurrency exchange. Charles chose the latter.
However, Charles soon regretted it. Due to the disagreements with BM on the development path, Charles chose to leave four months later.
It seems that the feud started at this time, and later BM and Charles attacked each other for a long time.
After leaving BM, Charles met a new partner - Vitalik Buterin.
In January 2014, the North American Bitcoin Conference was held, where Charles and other founding members of Ethereum, including Buterin, Di Iorio, Joseph Lubin and Gavin Wood, met and formally developed and launched Ethereum.
Later, the question of whether Ethereum should be run as a non-profit organization exacerbated the disagreement between Charles and other co-founders. Charles wanted to run it as a for-profit organization, while others refused, and Charles eventually left Ethereum.
Although he did not stay in BitShares and Ethereum for long, Charles accumulated enough influence capital by working with BM and Vitalik.
Entrepreneurship
In 2015, Charles and former Ethereum core member Jeremy Wood founded IOHK, and Cardano was born.
According to Charles, Cardano is an improvement over first-generation platforms like Bitcoin and second-generation blockchains like Ethereum.
He called it "the third-generation smart contract platform and cryptocurrency", which is the so-called blockchain 3.0. Later, a project also called itself blockchain 3.0, EOS, BM's third venture.
In 2017, Cardano completed most of its public offering in Japan, with Japanese investors accounting for nearly 90%, so it is often called "Japanese Ethereum".
Why in Japan?
This is related to Cardano’s organizational structure. On the official website, it is clearly visible that Cardano is operated by three teams: IOHK, Cardano Foundation and Emurgo.
IOHK leads technology research and development and is located in Hong Kong; the Cardano Foundation is responsible for publicity and promotion and is located in Switzerland; Emurgo is the investor and is responsible for regional business development.
Emurgo is based in Japan and claims to be focused on providing financial services to developing countries through blockchain technology, helping projects integrate their businesses into Cardano's distributed blockchain ecosystem and also leading ADA's fundraising.
At the end of 2017, ADA adopted a unique layering mechanism (settlement layer + computing layer) and became the world's first peer-reviewed project. It received extremely high scores from various evaluation agencies and almost became a star in the industry.
In addition to being called the “Japanese Ethereum”, ADA also has the title of “philosopher in the blockchain world”.
The project name Cardano is the name of Italian scholar Girolamo Cardano, whose contribution was the first to publish the Cardano formula, which was a general solution to cubic algebraic equations.
The name of the token ADA comes from the poet Byron’s only child from marriage, Ada Lovelace, the world’s first programmer.
The five development stages of the project are also named after historical figures.
Byron
: The first layer of the Cardano platform and the core of the Cardano system, which allows users to send and receive ADA Tokens.
Shelley (British romantic poet Shelley)
: Focused on turning Cardano into a fully decentralized autonomous system, starting with stake pools and delegation.
Goguen (American computer scientist)
: Brings different computing layers to make smart contracts for financial transactions possible.
Basho (Japanese haiku master Matsuo Basho)
: Focuses on performance and scalability.
Voltaire (French writer Voltaire)
: Focuses on sustainability and self-sovereign identity.
question
Byron, who came from a British aristocratic family, is said to have had more than 200 prostitutes and lovers in his life, and half of his money was spent on prostitutes and lovers.
In the Byron stage, the Cardano team seemed to have inherited Byron’s great legacy, which led to the prostitution scandal in 2018.
In July 2018, Li De, a business representative of Emurg China, angrily denounced the Emurgo team in the Wanda group of ADA (the average person in this group holds more than 10,000 ADA) for using the ICO money to engage in prostitution and being completely unprofessional.
According to Li De, Emurgo team members spent millions of yen a night on prostitution at public expense, but were very tight on the company's normal business expenses. They only had a budget of 2,500 yuan (about 40,800 yen) for the offline meetups that they should have promoted. And when they had spent all their money, they would sell their ADA on the market and continue to spend.
In addition, Reed also stated several crimes of Emurgo:
No strategic planning. The Emurgo team has no plan for future strategic development. They have tried various related businesses such as startup accelerators, ICO consulting, and VC investment, but none of them succeeded in the end. Strategic focus shift. Emurgo was particularly optimistic about the Chinese market before, but now believes that the Chinese market is saturated and is not optimistic about the Chinese market, so it has shifted to the Southeast Asian market. Internal power struggle. The three teams of the Cardano project compete for resources and have differences on the implementation of future projects. The Cardano Foundation initially just wanted to do gambling. Later, Japan's Emurgo CEO Ken and Charles wanted to build a public chain, so they pulled in former chairman of the board Michael to fill the facade. Later, Michael wanted to take power, and the three of them fought each other.
At the same time, as a project that uses technology as a marketing highlight, the development progress is very slow. When applications on Ethereum have blossomed everywhere and DeFiNFT has become an ecosystem, Cardano’s smart contract has been stagnant and has become a dead chain.
The scandal and the ongoing PR bear market have caused ADA's asset price to continue to fall from its 18-year high of $1.08, and has been hovering around $0.05 for a long time in 2019, a drop of 95%.
Comeback
On March 13, 2020, ADA fell to a low of $0.019. When most people thought it was just another failure, ADA staged a miraculous comeback.
On May 16, 2021, ADA rose to a high of $2.45.
In more than a year, the highest increase was more than 127 times. Even after two major drops, ADA is still around US$1.3 today, with a market value of more than US$40 billion.
Everyone is curious, how did ADA do it?
This question was also thrown to the founder Charles, who said that he didn't know what exactly happened?
“If I knew why prices were moving the way they were, I would be a trader, not a project owner, and focus on the growth of the Cardano ecosystem and its use in developing countries,” Charles said.
In 2020, offline marketing teams went deep into rural China to carry out MLM activities for ADA tokens, and most of the audience were middle-aged and elderly people.
At the dinner table, a group of investors shouted in unison the slogan "Own Ada, and you will be rich for life", pushing Cardano to the forefront of public opinion.
Charles responded by stating that its organizers have no connection with IOHK and they did not get permission to use images of Cardano.
He believes that this is a common problem in the industry, and some people use Ethereum and Ripple to commit fraud.
So, what did ADA do right?
Africa
Since 2018, Charles has set his sights on Africa.
Compared with economically developed but "involuted" markets such as China, the United States, Europe, Japan and South Korea, the African market is a virgin land of cryptocurrency that has not yet been cultivated on a large scale. Even now, there are only a few crypto organizations such as Cardano and Binance working on the African continent.
IOHK first entered Africa in Ethiopia, where it established Cardano Africa and actively cooperated with the local government, claiming to use Cardano's smart contracts to transform local infrastructure, such as the education system.
In April, Ethiopia’s Ministry of Education confirmed that the government is working with Cardano to develop digital identity services for the education sector through its Atala Prism subsidiary.
In the future, students across Ethiopia will be given a digital identity (DID) with metadata containing all information about their academic performance throughout their schooling.
Charles also painted a grand picture of the future:
“When millions of students graduate, as they enter the economy, eventually this infrastructure will be used to buy property, make payments, vote and everything else in their economic lives.”
This sentence can be translated as: When millions of students graduate, they will be inseparable from Cardano (ADA) in the future.
In addition to Atala Prism for digital identity, Cardano claims to have developed:
Atala Scan
- Anti-counterfeiting products that establish product provenance and auditability to ensure that every product sold is a certified original.
Atala Trace
— Supply chain products, which can be used by “farmers, transporters and retailers for product authentication and traceability from farm to table.”
From a big-picture strategic perspective, Cardano hopes to become the financial infrastructure for underdeveloped countries and be deeply tied to African countries.
However, some local people have expressed doubts about this.
Ethiopian businessman Kal Kassa, who has attended several Cardano events, called ADA a scam:
1. Cardano made a lot of empty promises, none of which were fulfilled; 2. There are countless social media bots, amateur marketing agents and overly enthusiastic brand ambassadors who brainwash you like robots; 3. In Ethiopia, they have not yet registered a sole proprietorship, private limited company, joint-stock company, project office or association.
Kassa called on the government to investigate IOHK.
In July, Coindesk published an article describing Cardano’s move in Africa as “crypto-colonialism,” prompting Charles to swear, “Coindesk has gone too far on this point, from barely acknowledging the existence of our project to calling us crypto-colonialism.”
In any case, Africa has gradually become the core marketing story point of Cardano, and many ADA "promotional" accounts on Twitter use ADA's African story as a "selling point."
POS
What can ADA be used for without smart contracts?
When you enter Reddit or any ADA community, they will tell you to do one thing quickly - Staking ADA.
According to stakingrewards, Cardano is the world’s largest POS blockchain network, with a staked amount of $29 billion and a stake rate of 70.58%.
Charles has always been an evangelist of POS and has promoted the popularization of the POS concept to a certain extent.
When Bitcoin faced environmental doubts, Charles immediately stood up and said in an interview with Forbes that ADA is green, environmentally friendly, ESG-friendly, and that the energy efficiency of blockchain is 1.6 million times higher than that of Bitcoin.
The goal of everything Cardano officials and the community do is to strengthen the POS network.
The path for ADA’s market value to rise is to increase the number of active addresses and continue staking.
(1) The number of POS addresses increases.
According to coinmetrics data, in March 2020, the number of active ADA addresses was only about 8,000. In May 2021, its active addresses soared to 177,000, an increase of more than 21 times.
Among them, the number of addresses participating in staking has continued to increase. At the beginning of June, the number of staking addresses just exceeded 600,000. One month later, as of August 3, the number of staking addresses has reached 724,809. Even in the bear market, it has increased by 20% in one month and has 2,769 active mining pools.
(2) The number of large account addresses increased.
According to coinmetrics data, the number of addresses holding 10,000 ADA has continued to increase since 2018, especially since March 2020, when the number of addresses holding 10,000 ADA has increased by 69.5%. Since the beginning of this year, the number of addresses holding 10,000 ADA has increased by 18%. Most of them are in the state of hoarding coins.
An investor told TechFlow that overseas, some communities will proactively use telephone or Internet means to precisely market to potential large investors to participate in purchases and pledges.
marketing
A strong cryptocurrency project cannot be separated from a strong community.
At the beginning of 2021, the r/Cardano community on Reddit had only 95,000 subscribers. In June, the number of community subscribers soared to 500,000.
Since the ICO era, community marketing has been Cardano’s specialty.
90% of Cardano (ADA)’s fundraising was completed in Japan. Some people in the Japanese financial industry believe that this is to avoid policy troubles in the West.
During the ICO promotion, Cardano conducted a full range of online and offline marketing in Japan. Some of the marketing tactics included:
Cardano makes people smile all over the world.
The founder, Charles, is a "genius mathematician".
Charles was a co-founder of Ethereum, and the tokens of the projects he had participated in saw amazing increases: the price of Bitshares tokens increased by 5.4 times, and the price of Ethereum increased by 60 times.
In addition to online promotion, Cardano will also hold offline conferences to interact with investors.
In terms of strategy, Cardano will adopt a 24/7 marketing strategy. You can always find ADA's "popular science" articles in the cryptocurrency section of Medium. Cardano recruits all-round content writers and technical writers all year round...
Secondly, Charles, who has 550,000 Twitter followers, has a wide influence on social media and is good at catching hot spots and marketing ADA.
When Musk announced that Tesla would stop accepting Bitcoin as a payment method due to excessive energy consumption, Charles immediately came out to explain to Musk how ADA is green and environmentally friendly. The Cardano Foundation invited Tesla to accept its native cryptocurrency ADA, saying that ADA is a great fit for Tesla.
In January 2021, Charles stated in a recent report on Cardano and the state of the cryptocurrency market that Dogecoin is unsustainable and may lead to systemic and catastrophic failure, and believed that Dogecoin would "destroy" the reputation of the crypto industry.
In May, perhaps in order to please Musk, Charles expressed his willingness to help Musk fix Dogecoin, saying it would be interesting if Cardano and Dogecoin worked together.
Although such behavior is too "dog-licking", in the eyes of many community members, Charles is good at "making trouble" and is not particular about details. He is still the spiritual pillar and soul of the entire ADA community.
“Charles is not pretentious. This big guy is personally working on the front line of marketing. He once held several AMs in a week and has been working for Cardano. He is much better than those project founders who just launch the coin and then go for investment.”
One investor said so.
Timo, a student at London Business School, said he bought ADA after watching Charles' Ted Talk and other interviews about him.
“This project is more substantial than other projects, as can be seen from the team’s presentation on the web and Charles’ many interviews.”
In the Chinese community of ADA, there are a group of programmers from major Internet companies. In the eyes of some people, Cardano is a real technical project and is most likely to challenge the position of Ethereum.
Cardano smart contracts are getting closer and closer. Charles recently said in a live broadcast that it is expected to be completed between August and September. Once the Alonzo hard fork is activated, users can "run smart contracts."
Amid controversy, Cardano is about to open a new chapter.
Finally, let me share a little story.
There used to be a group of large ADA holders, with each person holding millions of ADA. The atmosphere in the group was once harmonious, until the bear market in 2018, when a newcomer spread the "truth" about ADA in the group: he angrily accused the official of spending money at will, inaction, slow technological progress, and a false reputation... After careful analysis, everyone felt that it made sense.
As the bear market fell, more and more people chose to sell, and even large holders with tens of millions of shares sold out and left the market... Since the beginning of this year, everyone has been dumbfounded, and the smart people have successfully avoided getting rich quickly.
Were they wrong? It seems not. They saw the real problem and made corresponding decisions. So where was the problem?
Later, an investor who has held ADA for a long time said meaningfully, Do you want to be Right or do you want to Make Money?
