Cardano's Founder Predicts Hard Times Ahead. Here's Why That's a Reason to Sell It.

Cardano's founder made a few blunt remarks about the network recently.

He sees its ecosystem encountering mounting struggles, even more than before.

Cardano 's (CRYPTO: ADA) community governance system is now fully operational, and so far, the community has voted to defund its own annual summit and starve a cybersecurity project of resources. Two of the chain's most prominent projects shut down within six weeks of each other.

Founder Charles Hoskinson responded to the chaos by announcing he was "taking a break." At this point, the only thing Cardano holders seem to agree on is selling; the coin is down 74% in the past year.

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Hoskinson's prediction does not, in itself, constitute a reason to sell Cardano; people predict all sorts of things about the market all the time, and often for self-motivated reasons. But the factors that drove his prediction, when paired with other issues Cardano has, do constitute a reason to sell this coin, so let's take a look at what's going wrong.

The crux of the problem with Cardano is that its ecosystem is small and rapidly weakening.

Its total value locked (TVL) in decentralized finance (DeFi) protocols has cratered from $653 million in December 2024 to $95 million today. Its number of daily active wallet addresses was just under 16,000 in May, down from approximately 485,000 active wallets per day at its November 2021 peak. Similarly, the number of daily transactions on the chain is just a fraction of its prior high, as are transaction fees . In other words, liquidity and users are exiting the chain together, which is a very bad sign.