In a surprising move, Cardano’s ADA (ADA) token was named by President Donald Trump on March 2 as one of the cryptocurrencies to be added to the US strategic crypto reserve. This move, clarified by Trump’s executive order on March 6, will see altcoins become part of the Digital Asset Stockpile (DAS) under the ‘responsible stewardship’ of the Treasury.
The inclusion of ADA in a government-run portfolio has stirred mixed reactions across the industry. While Cardano’s long-time loyal supporters welcome this move, some crypto enthusiasts question ADA’s inclusion in the digital asset stockpile. Hence, it’s crucial to review ADA’s fundamental aspects and utility to determine if it deserves a spot in the US Digital Asset Stockpile.
Cardano, launched via an ICO in 2017, is among the earliest smart contract platforms. It stands out owing to its research-driven design approach and utilization of a delegated proof-of-stake mechanism complemented by an extended UTXO accounting model. Cardano’s unique approach to smart contracts, as highlighted by ‘Cardano_whale,’ includes “non-negligible fees, voting power, decentralized consensus, all native token trading paired with it.” Cardano’s decentralized governance model and ADA’s utility, which many VC coins lack, are emphasized as key strengths.
Cardano’s Project Catalyst, one of the biggest decentralized funding programs in crypto, democratically allocates treasury funds from transaction fees and inflation to community proposals. Unlike Ethereum, which still depends on offchain governance for major upgrades, Cardano is transitioning entirely to onchain governance. The ADA coin, with a maximum supply of 45 billion, is used for network fees, staking, and governance.
However, ADA’s limited usage within the crypto ecosystem raises concerns about its long-term value. For instance, Cardano recorded an average of 71,500 daily transactions in Q4 2024, a stark contrast to Ethereum’s $552 million in fees over the same period. Other metrics, including developer count, stablecoin market share, and DeFi ecosystem, also lag behind competitors.
Despite these limitations, ADA’s capped supply and Cardano’s focus on decentralization may spur adoption and relevance in the future. Projects like Atrium Lab are harnessing Cardano’s native compatibility with Bitcoin via the eUTXO system, potentially unlocking new DeFi frameworks on Bitcoin and driving activity to Cardano.
As per David Nage, portfolio manager at venture capital firm Arca, “Cardano ecosystem needs to find and support developers to create products and applications that millions of people enjoy and depend on. After all that, putting ADA into a US national reserve begins to make more sense.”
This article is for informational purposes only and should not be construed as legal or investment advice. The thoughts and views expressed are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.
