State of Cardano Q1 2025

Key Insights

• The Cardano Constitution was enacted onchain on Feb. 24, 2025, implementing CIP-1694 from Q4 2024. This enabled decentralized governance, led by DReps, SPOs, and the Constitutional Committee.
• The circulating market cap of ADA decreased by 21% QoQ to $28.8 billion, while the price of ADA decreased by 22% to $0.66 in Q1.
• Fees (USD) decreased by 28% QoQ to $1.3 million, driven by a 28% decrease in average daily transactions to 51,500.
• DeFi TVL decreased 29% QoQ to $319.3 million, slightly exceeding the broader market decline. Cardano’s DeFi diversity score increased 13% to 9, indicating a more distributed TVL across protocols.
• Stablecoin market cap increased 30% QoQ to $30.2 million, with USD-backed stablecoins USDM ($10.4 million market cap, +40% QoQ) and USDA ($7.2 million market cap, launched in Q1) driving growth despite decreasing overall DeFi activity.

Primer

Cardano (ADA) is a Proof-of-Stake (PoS) Layer-1 blockchain launched in 2017. Cardano aims to provide security, scalability, and functionality to decentralized applications and systems building atop the network. In addition to its community of developers, node operators, and projects, Cardano is supported by entities like Input Output Hong Kong (IOHK), Cardano Foundation, Intersect, EMURGO, and others. These entities support the network’s development, adoption, and finances as Cardano is in the age of Voltaire (Governance), the final phase of its roadmap.

Cardano has taken a unique approach to development compared to other smart contract networks. The Ouroboros consensus mechanism allows for stake delegation, while the extended unspent transaction output (eUTXO) accounting model enables native token transfers and scalability.

With a dedicated community of users and developers, Cardano has demonstrated staying power. After the launch of smart contract support via the Alonzo hard fork in 2021, Cardano began to compete in more traditional crypto markets, such as DeFi and NFTs. For a full primer on Cardano, refer to our Initiation of Coverage report.

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Research Contents

State of Cardano Q1 2025

Financial Analysis

ADA is the native currency of Cardano that is used as the primary medium of exchange when transacting on the network. ADA has three primary network-level use cases:

ADA is also used to elect and reward Delegated Representatives (DReps) who leverage staked ADA in governance. DReps’ influence can be evaluated based on how much ADA is delegated to them. Additionally, ADA is used to reward voters and fund projects in Project Catalyst.

ADA’s circulating token supply inflates until it reaches its maximum token supply of 45 billion. After each five-day epoch, 0.3% of ADA reserves (i.e., the ADA not in circulation) are distributed as SPO rewards. Inflation trends towards zero as the reserves deplete and the circulating supply approaches 45 billion.

Annualized real staking yield accounts for any value dilution due to inflation. In Q1, it was 0.7%, though this can vary by stake pool.

ADA’s price decreased 22% QoQ to $0.66 in Q1, while ADA’s market cap decreased 21% QoQ to $23.8 billion, with a slight discrepancy due to a 0.4% increase in circulating supply. ADA’s circulating market cap rank remained 9th at the end of Q1. The price and market cap decrease coincided with a 19% decline in the total crypto market cap in Q1.

Each transaction on Cardano is accompanied by a network transaction fee for processing transactions and paying storage costs. Fees are calculated by a minimum fee plus a variable fee based on transaction size. Fees (ADA) declined 28% QoQ to 1.4 million, and fees (USD) declined 32% QoQ to $1.2 million, driven by ADA’s price decline and a 28% decrease QoQ in average daily transactions.

Cardano’s treasury balance (ADA) rose 5% QoQ to 1.7 billion ADA, while the treasury’s U.S. dollar value decreased 19% to $1.1 billion. The treasury provides funds to maintain and develop Cardano, with resources deployed through community governance as of the Plomin hard fork in Q4. Currently, 20% of Cardano’s transaction fees go to the treasury, which can be adjusted via governance.

Network Analysis

Cardano’s average transaction fee (USD) rose 27% to $0.29, while the average transaction fee (ADA) rose 1% QoQ to 0.34. This divergence highlights the impact of ADA’s price volatility on network usage costs.

The total stake (ADA) and ADA’s staking rate (rewards earned from staking ADA) both declined by less than 1% QoQ. However, the total stake (USD) declined 22% QoQ to $14.4 billion, reflecting ADA’s price decrease..

Cardano’s average daily transactions decreased by 28% QoQ to 71,500, while daily active addresses decreased by 2%, which suggests users were less active in Q1. The ratio of transactions to active addresses decreased by 7% QoQ to 1.5. A decreasing ratio suggests activity is becoming concentrated across fewer users.

Governance

Chang Upgrade

In April 2024, Cardano unveiled the Chang Upgrade, a two-phase network hard fork that would enable onchain governance and fulfill the core purpose of Cardano’s final roadmap phase (Voltaire). Voltaire takes the final steps toward Cardano’s self-sustainability via onchain voting, offchain mechanisms, and institutions like the member-based organization Intersect.

• Phase one began on Sep. 1, 2024, initiating a technical bootstrapping phase that sets the stage for decentralized voting and governance actions.
• In January 2025, Cardano launched Phase two (the Plomin Upgrade), activating the Plomin Hard Fork and transitioning Cardano to fully decentralized governance. This upgrade empowered ADA holders to vote on key blockchain decisions, including treasury withdrawals, parameter changes, and protocol upgrades, either directly or via Delegated Representatives (DReps). By March 2025, 1,220 DReps were actively participating in the governance process, strengthening Cardano’s community-driven decision-making.

Cardano Constitution

In December 2024, the Cardano community held a Constitutional Convention, gathering the Cardano community to shape the Cardano Constitution. On Feb. 13, 2025, the Interim Constitutional Council (ICC) unanimously voted “Yes” to support the Governance Action for the new constitution. On Feb. 24, 2025, the Cardano Constitution was officially enacted onchain, replacing the interim constitution. The new constitution established clear principles for decentralized governance (based on CIP-1694), clear roles and responsibilities for DREps and SPOs, the Constitutional Committee, and ethical guidelines for governance participants.

Elections for Intersect’s eight specialized committees (Steering, Budget, Civics, Growth and Marketing, Membership and Community, Open Source, Technical Steering, and Product) were underway in Q1 2025. These biannually elected committees support DReps and SPOs in decision-making for Cardano governance.

Following the ratification of the constitution, DReps, SPOs, and the Constitutional Committee now govern all areas of the network via an onchain voting and treasury system based on CIP-1694. This transfers responsibility from IOG, Cardano Foundation, and EMURGO, which have historically held all seven governance (genesis) keys. Governable actions include those related to the Constitutional Committee, parameter changes, constitution updates, hard fork initiation, protocol parameter changes, and treasury withdrawals.

Ecosystem Analysis

Average daily Dapp transactions decreased by 2% QoQ to 10,600 in Q1. The top Dapps by volume in Q1 were DexHunter, Minswap, and WingRiders, with DEX activity driving the majority of application usage on Cardano.

• DexHunter is a DEX aggregator on Cardano designed to find the best price across multiple DEXS. In Q1, it had 495,200 total transactions, a 1% decrease QoQ. It was the most popular DEX on Cardano in Q1, with a $268.0 million quarterly volume. In Q1, DexHunter expanded functionality with leveraged trading and a new developer API.
• Minswap is a popular DEX on Cardano offering low fees, swaps, and yield farming on Cardano-native tokens. Minswap had 78,200 total transactions in Q1, a 51% decrease QoQ. In Q1, Minswap announced a proposal to incorporate Minswap DAO LLC to enhance compliance and support ecosystem growth. The proposal passed on April 7, 2024.
• WingRiders is a DEX on Cardano with a hybrid AMM model that leverages a stable swap pool, making it ideal for stablecoin trading. Wingriders recorded 32,700 total transactions in Q1, a 55% decrease QoQ.

The average daily DEX volume on Cardano decreased by 5% QoQ to $5.8 million in Q1, while stablecoin supply increased 30% QoQ. This divergence suggests a shift in user behavior from active trading to stablecoin holding, aligning with broader risk-off sentiment observed across crypto markets in Q1.

DeFi

DeFi TVL (USD) on Cardano decreased 29% QoQ to $319.3 million in Q1, compared to an industry-wide DeFi TVL decline of 26%. Notably, the DeFi diversity score (i.e., the number of protocols making up 90% of a network’s TVL) increased 13% to 9, demonstrating increased diversification despite the overall TVL reduction.

Despite Minswap’s TVL declining by 21% QoQ to $77.4 million, it surpassed Liqwid as the leading protocol by TVL. Liqwd’s TVL declined by 38% QoQ to $70.3 million. TVL also declined on other protocols like Indigo, Splash, Djed, and Aada, which is consistent with the broader TVL contraction.

• Liqwid is a lending and borrowing protocol on Cardano designed for Cardano native assets. The protocol introduced qTokens, which are interest-bearing tokens representing collateral in lending pools, similar to liquid staking tokens on other networks. In Q1, Liqwid upgraded its V2 dashboard with a new UI/UX featuring enhanced analytics. Liqwid has also implemented programmatic buybacks of its native token, $LQ, using protocol revenue.
• Indigo is a synthetic asset issuer that offers iUSD, iBTC, and iETH. In Q4, Indigo completed an upgrade to V2.1, introducing an algorithmic interest rate that splits interest between the treasury and INDY stakers. Indigo also launched a new website dedicated to developing the Indigo Protocol for the Indigo Foundation. The Indigo Foundation introduced PoCoP (Proof-of-Commitment-Protocol), a points system allowing users to earn $INDY tokens by creating content for the Indigo DAO. In Q1, Indigo announced a proposal to continue supporting PoCoP onchain.
• Splash is a DEX launched in July 2024 after a token sale for SPLASH raised 17.2 million ADA in May. Splash also worked to develop snek.fun, a protocol similar to pump.fun on Solana that allows users to launch and trade tokens easily. The application launched in September and saw over 2,230 tokens created and 4.5 million ADA in trading volume in the first 24 hours. In Q4, Splash launched the Splash DAO, enabling users to vote on parameter changes, manage SPLASH inflation, and earn rewards.

Stablecoins

In Q1, Cardano’s stablecoin market cap grew 30% to $30.1 million. Cardano’s first stablecoins (IUSD and DJED) were launched in November 2022 as fully overcollateralized stablecoins. In Q1, the market cap of iUSD decreased 20% to $7.5 million, whereas DJED increased 2% to $3.7 million. USDM grew 40% QoQ to $10.4 million, and USDA attracted $7.2 million in its first quarter, demonstrating a desire for new USD-backed stablecoin alternatives on Cardano.

• USDA is a Cardano-native, U.S. dollar-pegged stablecoin issued by Anzens, with EMURGO providing technical expertise for Anzens’s operations. It is fully backed by U.S. dollar reserves and equivalents (e.g., U.S. government treasuries), and pegged 1:1 with the U.S. dollar. USDA launched on Minswap on Mar. 7, 2025. Within a week, it achieved over $5.5 million in liquidity and 3,400 transactions. On March 19, the platform went live for eligible U.S. retail users in 14 states.
• Moneta’s USDM launched on March 16, 2024. Unlike iUSD, DJED, and MyUSD, USDM is not algorithmic or synthetic. Like USDA, USDM is collateralized 1:1 with U.S. dollar and dollar equivalents.
• Mynth’s MyUSD launched in December 2023 and is collateralized by USDC and USDT. In June 2024, Mynth introduced MyUSD staking to earn Mynth’s MNT tokens. This program drove growth for MyUSD in H2’24. Mynth is a cross-chain stable swap platform powered by Cardano.
• DJED Stablecoin was developed by IOHK and is backed by ADA and SHEN (a token reflecting the stability of Cardano’s reserve). DJED is an overcollateralized stablecoin that uses SHEN as the reserve coin to reflect the overall sentiment of ADA. When the ADA token price increases, so does the reserve coin SHEN.

NFTs

Average daily NFT sales on Cardano declined 45% QoQ to 238 in Q1, while average daily NFT trading volume (ADA) decreased 53% to 54,200 ADA. This 45% sales decline was steeper than the industry average of 7%, indicating Cardano’s NFT ecosystem was particularly impacted by broader market conditions. jpg.store remained Cardano’s top NFT marketplace based on transaction volume, and was Cardano’s fifth most popular dapp in Q1.

In June, jpg.store launched NFT lending and borrowing, allowing NFT holders to borrow assets against its NFTs. In February, jpg.store launched Comet, the first Cardano-native trading app specifically built for mobile. The protocol was in a closed beta for most of Q1 and officially opened to the public on March 18.

Development, Growth, and Community

Roadmap

Cardano’s development has historically followed a structured roadmap defined by distinct eras: Byron (Foundation), Shelley (Decentralization), Goguen (Smart Contracts), Basho (Scaling), and Voltaire (Decentralized Governance). Now that Cardano has completed the Voltaire phase, the network is entering a new era where its roadmap is driven by the community rather than a centralized team. In this model, development priorities and strategic decisions will be shaped collectively by community input. Intersect, a member-based organization contributing to Cardano’s continuity and development, will administer and provide continued support, ensuring that the roadmap reflects the collective vision and needs of the Cardano ecosystem.

Cardano’s new technical roadmap is anchored in three core pillars, each addressing critical aspects of the platform’s evolution:

1. Scalability: Cardano will enhance transaction efficiency by adopting optimistic and zero-knowledge Layer 2 rollups for offchain aggregation. At the same time, developments in consensus—featuring Ouroboros Leios and Peras—aim to reduce block production time from 20 seconds to just a few seconds, and reduce finality from 12 hours to just a few seconds. Additionally, deploying Mithril Certificates speeds up node verification, while upgrades to core nodes with improved structures, revised incentives, and anti-grinding measures further boost performance.
2. Usability and Utility: Cardano will add multi-language support with tools like Plinth, Plutus High Assurance, Aiken, and plu-ts. They are also integrating decentralized identity management through Hyperledger Identus, bolstering privacy with the Midnight partner chain using zero-knowledge proofs, and simplifying transactions with Babel fees that allow fees to be paid in any token.
3. Interoperability and Extensibility: Cardano plans to adopt a microservices-based approach for scalable development, expanding partner chains with initiatives like Minotaur to enable trustless interoperability with networks like Ethereum. Additionally, Cardano announced they’re exploring a Bitcoin programmability layer to allow Bitcoin users to access decentralized applications and DeFi services using solutions like Midnight for private transactions.

Partner Chains

Partner Chains is an all-encompassing term that can include technically sovereign sidechains or modular networks. These networks include Milkomeda C1 (which announced they were shutting down following the end of the quarter), Wanchain, Midnight, and World Mobile.

Launched in August 2024, the Alpha V1 Toolkit allows developers to bootstrap the security of Partner Chains by leveraging Cardano’s network of SPOs. The toolkit introduces a committee selection algorithm that integrates Cardano data to form trusted committees capable of producing a predetermined percentage of blocks, enhancing security by quickly growing validator sets.

Midnight, developed by Input Output Global (IOG), offers data protection and privacy capabilities using zero-knowledge proofs (ZK Proofs). It launched on testnet on Oct. 1, 2024, providing a sandbox environment for developers to use its capabilities. Midnight’s programming language, Compact, is based on TypeScript to enable Web2 developers to write onchain smart contracts easily. The project continues to grow via partnerships and hackathons. Charles Hoskinson confirmed on an X post in November 2024 that ADA holders would be eligible to receive a portion of the NIGHT token distribution. As of Q1 2025, Midnight remains in the testnet phase, with no announced date for the mainnet launch.

Project Catalyst

Project Catalyst is a decentralized fund where ADA tokenholders decide which proposals receive funding from Cardano’s treasury. Through 12 funding rounds, Project Catalyst has funded 2,161 proposals worth $152.5 million in ADA.

Voting for Fund12 concluded in July 2024, with 258 funded proposals for 46.5 million ADA. Funding was distributed across six categories, with the highest-funded proposals coming from the “Cardano Partners and Real World Integrations” category.

Proposal submission for Fund13 began at the tail end of Q3, and the round’s voting phase will conclude in December 2024. Fund 13 aims to distribute 50 million ADA toward six categories. In this fund, Cardano actively lowered the minimum ADA required for voting to just 25 ADA, a notable drop from the 450 ADA threshold set since Fund4. This enables more tokenholders to participate in the fund’s token allocation process. Proposers requested over 40 million ADA through submissions, but no funds were allocated in Q1. Project onboarding began in January, although there have been no additional updates on the fund.

Other Updates

Apart from the larger initiatives above, Cardano had several ecosystem updates:

• In January 2025, the Cardano Foundation partnered with Draper University to launch a five-week accelerator program for 20 blockchain startups. The program, hosted in Silicon Valley, offers $500,000 in funding and mentorship from industry experts. It focuses on scalability, interoperability, and real-world applications, aligning with Cardano’s roadmap. Selected startups gain access to Cardano’s developer tools and network, fostering ecosystem growth.
• In February 2025, the Hoskinson Family Office invested $1.5 million in W3i Software, a Cardano ecosystem project developing blockchain solutions for enterprise adoption. W3i manages Moneta, the issuer of USDM, and handles integration with dApps and payment platforms.
• On March 2, 2025, President Donald Trump announced Cardano’s ADA token as an intended part of the U.S. Digital Asset Stockpile, formalized by a March 6 executive order for altcoin inclusion under Treasury stewardship.
• On March 6, 2025, the Cardano Foundation partnered with SERPRO, Brazil’s largest state-owned IT company, to integrate blockchain into public sector operations. The collaboration launched the Cardano Academy for SERPRO’s 8,000 employees, including 2,000 developers, to enhance blockchain expertise. It aims to improve transparency, security, and efficiency in Brazil’s digital government services, which process over 33 billion transactions annually.

Closing Summary

Cardano’s performance in Q1 2025 reflected a network in transition against a challenging market backdrop. ADA’s market cap declined 21% QoQ to $23.8 billion as the token price fell 22% to $0.66, largely tracking the broader 19% decline in total crypto market cap. Network activity showed reduced engagement with quarterly fee revenue dropping 32% to $1.2 million while average daily transactions fell 28% to 71,500. Notably, despite price volatility, staking commitment remained stable with total staked ADA decreasing only 1% to 21.6 billion, underscoring continued long-term holder conviction. Ecosystem metrics revealed divergent trends, with DeFi TVL contracting 29% QoQ to $319.3 million (compared to a 17% industry average decline). In comparison, the stablecoin market cap expanded 30% to $30.1 million, driven by fiat-backed options like USDM and USDA.

The Plomin Upgrade, enacted via CIP-1694, empowered 1,220 DReps to drive trustless governance, marking a historic milestone. With Ouroboros Leios poised to reduce block production and finality to a few seconds, Midnight’s ZK-proof privacy features, and high-profile partnerships like SERPRO and the Grayscale ETF filing, Cardano is well-positioned to lead in scalable, privacy-focused DeFi, capturing institutional and global adoption.

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