Charles Hoskinson Shuts Down Claims That Cardano's High Market Cap Is Artificially Inflated

Cardano founder Charles Hoskinson has responded to claims that Cardano's high market cap is artificially inflated due to investors being locked into ADA holdings and unable to sell.

Cardano founder Charles Hoskinson has hit back at claims that Cardano’s high market cap is artificially inflated due to investors being locked into ADA holdings and unable to sell.

The claims were made by MartyParty during an episode of the InvestAnswers podcast, which also featured CTO Larsson and Mando. MartyParty argued that the market cap reflected locked staking pools rather than the true value of the cryptocurrency.

"The lies and misinformation about Cardano have reached epic levels. Stake isn't locked, but they still lie. Why does anyone trust these people anymore?" Hoskinson tweeted.

Liquid Staking vs. ‘Traditional Staking’

Unlike other cryptocurrencies, ADA tokens are not locked up when staked on the Cardano blockchain. This means that ADA holders can still trade and use their tokens for other DeFi activities while they are staked.

With more ‘traditional’ staking, tokens are locked up and can’t be used for any other purposes. These assets are essentially frozen in order to participate in network security and governance.

Highlighting the importance of liquid staking, which is a key feature of Bitcoin, user StakeWithPride commented on the matter.

Hoskinson's main issue is with the false statement that the market cap is high because ADA owners are unable to sell due to a lock-up period, which is not the case.

According to stakingrewards, 63% of ADA is currently staked, making it one of the most heavily staked cryptocurrencies. Out of a max supply of 45 billion, 22.6 billion coins are currently staked, with a circulating supply of 35.9 billion as per CoinMarketCap.

Cardano Activity Increases Post Update

Cardano, which has often been called a ghost-chain and criticised for its slow development, recently received an upgrade to make it more decentralised.

The Chang upgrade is a first step in the Voltaire epoch, which should lead to full decentralisation.

Development and activity around Cardano are slowly but surely increasing. Recently, Ben Goertzel's SingularityNET and Artificial Superintelligence Alliance deployed the ASI token on Cardano, replacing the AGIX token.

According to Goertzel, Cardano was the network of choice for its speed, security and low cost, as well as its “mathematical elegance”.

At the same time, the price of ADA has increased by almost 10% over the last week. At the time of writing, CoinMarketCap has the price for one ADA at US$0.35 (AU$0.52).

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