The last few weeks of the crypto market have been marked by steady losses, with most assets experiencing a decline in value. ADA, the native token of the Cardano blockchain and the 7th biggest cryptocurrency, has been one of those tokens suffering a significant hit in these recent times.
According to data from CoinMarketCap, Cardano (ADA) has plummeted by about 10% in the last seven days, showing a worse performance than other major altcoins, including Ethereum (ETH), Binance Coin (BNB), and Tron (TRX).
Interestingly, ADA’s decline over the last few weeks has been consistent even amidst news of a historic milestone for the Cardano network. On February 28, Clay Nation, a Cardano-NFT project, announced its upcoming integration with The Sandbox, one of the most popular metaverse games boasting of over 201,000 monthly players.
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Following implementation, this will be the first time a Cardano-based project will be integrated with the prominent P2E game. While this news generated some excitement among the Cardano community, it has so far had no significant positive effect on the downtrend of the ADA token.
At the time of writing, ADA is trading at $0.31 and has gone down by 2.16% in the last 24 hours. On the bright side, its daily trading volume is on the rise, gaining by 13.15% to hit its current value of $309.9 million.
ADA trading at $0.32 | Source: ADAUSD chart on Tradingview.com
Behind ADA’s Fall
Generally, the crypto market has been in a bearish state for weeks now due to the ongoing financial woes of the crypto-friendly bank, Silvergate. Following the crash of FTX in November, Silvergate had to pay out about $8 billion in withdrawal orders, leading to the bank recording a loss of $1 billion in the fourth quarter of 2022.
After a delay in the release of the Silvergate bank’s annual report for 2022 caused much market panic last week, the Silvergate Capital Corporation – the bank’s parent company – confirmed many investors’ fears on Wednesday as they announced their intention to close down their banking firm operations and liquidate all its assets.
The ongoing collapse of the Silvergate bank has led to a high level of negative sentiment among investors leading to many assets, including Cardano experiencing a steep decline in value. However, that does not seem to be the only issue plaguing the Cardano network.
Cardano (ADA) Faces Internal Criticisms Over Governance Proposal
Recently, Cardano has gotten much criticism from its users and various web 3 enthusiasts due to a current governance proposal that many believe threatens the decentralization of the network governance.
According to a tweet by popular Web 3 Advisor Vannessa Harris, the approval of proposal CIP-1694 – as it is known – will allow Input-Output Global (IOG), developers of Cardano, to exhibit a domineering influence over the Cardano network.
In addition, Harris also stated the new governance mechanisms would prevent regular ADA stakers from voting and participating in governance.
In response to these claims, Charles Hokinson, Cardano Founder, stated that the critique was wrong and only spreading Fear, Doubt, and Uncertainty.
Meanwhile, many members of the Cardano community have called for a Twitter space for the project developers to address these concerns.