In a Christmas Eve YouTube chat, Cardano founder Charles Hoskinson reflected on the achievements and challenges of 2021, and looked ahead to what is coming in 2022.
Cryptocurrency - 2021 Big Picture
2021 was a banner year for the entire Cryptocurrency ecosystem. Bitcoin, Ethereum, Cardano, and others showed enormous growth and hit all time highs. Cardano started the year at $0.18, and ended at about $1.36, having flirted around the $3 mark in early September. The world of NFTs exploded: everyone has now heard of this new type of digital asset, even if we don’t all yet know why we would want it! The DeFi space as a whole has grown from a 10 billion market cap, to a 100 billion market cap. At the same time, we also saw 10.5 billion dollars worth of loss in DeFi, due to scams and bad software that leaves the door open to bad actors.
Cardano - 2021 Achievements and Challenges
Growth in price and market cap is an important measuring stick, but it’s not the only way to mark progress. This year the Hoskinson Center for Formal Mathematics was opened at Carnegie Mellon University. Charles appeared on the Lex Friedman podcast, and awareness of Cardano grew exponentially. The Cardano Summit in September brought together more that 100K participants around the globe at in-person and virtual events.
Charles reflected on predictions he made in a 2020 tweet, and how they panned out this year. In the tweet, he said
“I predict by this time next year, we'll have thousands of DApps and hundreds of assets on Cardano.”
As it turned out, this was both an underestimate and an overestimate:
- Assets: over two million assets have been issued on cardano! Not thousands, but millions. Most of these are NFTs.
- Apps: because it took longer than expected to launch smart contracts, the era of DApps on Cardano is just now in its infancy. However, things are starting to take off: Right now there are 127 projects actively writing code with the intent to deploy a DApp on Cardano; some of these are on track for a Q1 release in 2022.
Cardano - the 2022 Forecast
Charles explained that the slow and careful setup of the Cardano network was intentional, and sets the stage for success as it grows:
“We started this project with correctness as our highest priority, and now that correctness has been achieved, we're moving over to performance-tuning, optimization, usability… and that is a game of rapid iteration - you do a little bit, you get a huge advantage.”
Developers: Cardano has no shortage of developers. At last count, more than 10K developers have joined the Plutus Pioneer program. The goal is to get the Cardano developer training program into a 2 month cadence, running 6 classes per year, and do it indefinitely.
Community: Based on metrics coming from Daedalus wallet downloads, social metrics, and other measures, there are an estimated 2 Million participants in the Cardano community. This demonstrates healthy scale and velocity for the project!
Project Catalyst: Treasury-funded & crowd-sourced, Project Catalyst has grown by leaps with each round. Rounds 1-6 comprised about 700 proposals total. In round 7 alone, that number doubled with more than 700 new proposals. Each proposal is a bid to grow Cardano according to community-set goals, and the energy being poured into the project is inspiring. You can see an interactive directory of these proposals, including filters to show which got funded, using our community tool at lidonation.com/catalyst-proposals.
Custodianship: There are three custodial companies that have been involved since the beginning: The Cardano Foundation, Emurgo, & Input/Output. There have also been many companies that have participated in special projects. In 2022, a formal open-source project structure will be established. At that point, all the founding institutions and participating companies will be integrated into a new, more open and decentralized structure. This is an important step toward making Cardano a Decentralized Autonomous Organization.
Optimization: Three Cardano Improvement Proposals (CIPs) are ready to be implemented in the new year. The Cardano Node 1.3.3 release is expected to result in a 50% reduction in sync time for Daedalus, as well as reducing memory utilization. These and other planned enhancements are on track for 2022.
Mithril: This IOHK-developed protocol will be an important tool for creating lightweight blockchain apps that are fast and secure.
Hydra: This solution for global scalability of the network is on-schedule for 2022 release.
Projects: Of the 127 DApps projects currently building; the one Charles is most excited about is Pezesha. The goal of the project is to put together an end-to-end microfinance transaction on Cardano: A real person in Kenya or somewhere, with a blockchain-based identity and credit score, with a stablecoin on the other side of the transaction, using Cardano as the settlement rail.
“Peer-to-peer, person to person: click a button, loan goes to them, they pay it back, it goes to the other side.”
In Africa, where Pezesha is based, loan interest rates in the greater market range up to 80%. Lenders are often predatory and corrupt. Market-wide default rates are around 40%. In this context, Pezesha is doing great work, charging only 3% interest monthly (~36% annually) and boasting a default rate around 2%. By making affordable and honest microfinancing readily available using blockchain, Charles predicts that healthy competition would drive rates even lower. These are the financial tools that people in some parts of the world take for granted. They empower people to build better futures for their families, communities, and nations.
Charles reflected back to the dream he espoused in his TED talk in 2014. In that talk, he said we would build a financial operating system for the world. He said it must be done with peer-review and formal methods. He admitted it would be a long, arduous, and systematic march:
“It's not sexy. It's not defined by surprise announcements. It's not defined by sudden partnerships and burns and …other gimmicks that the space has been defined by. Just good old-fashioned hard work.”
In an industry that is often polarized by maximalists and an “Us v. Them” mentality, it’s refreshing to hear a very different view:
“It doesn't matter who wins, because we win. Humanity wins. The people win. [We are doing this] as an industry to do better, to live in a more fair world, a more equal world…[We are doing this] as an industry so that we together don't have to pessimistically, cynically accept what has been given to us. That is the rally cry: ‘Just do better!’”
Stay tuned here to find out if and when these forecasted developments come to fruition. Here’s looking forward to another busy year of news - successes, setbacks, and just doing better - together!