Is Anyone Going to Point Out the Absurd On-Chain Metrics For Cardano?

Blockchain Analysis Jun 14, 2020

If one were to take an honest look at the blockchain metrics for Cardano over the past few days/weeks, it would be hard to come to any conclusion other than that the project has been 'hijacked' (assuming that it ever was placed in the hands of the larger blockchain electorate (refering to all of us 'commoners' that aren't Charles Hoskinson).

Curiously though - if one were to judge their opinion of Cardano's popularity (relative to other cryptocurrencies) in the blockchain sphere alone, they would be justified in disagreeing with our sentiment above that Cardano isn't really used by anyone.

Let's Cut to the Chase

Readers that are curious or want to follow along and probe further than where this report will go so that they can draw their own conclusions about what they believe the on-chain metrics we've isolated mean should start here with this link and follow along =

This will be our starting point as we dissect why Cardano's ecosystem isn't even oriented in a way to achieve its goals (i.e., unsustainable, no real traction, no pre-existing ecosystem to justify the onboarding of stakeholders to essentially be rewarded with more of something that has no viable use - end result = perpetual disincentive)

Blockchain Metrics for $ADA Make Their 'Staking' Fantasy an Impossible

Ouroboros is the prime goal of Cardano. Ouroboros is that chain's consensus algorithm (proposed since it seems it will never be out of some sort of 'beta phase')>
Additiona implementations / staggered deployments are only to serve as the foundational layer or stepping stone for the vision of Ouroboros.

We won't get into the technical details here - but know that it is a staking protocol that was originally designed the same flaws that most other 'Proof of Stake' projects possessed in 2017:

No actual incentive for stakeholders of the protocol

No realistic reason for anyone to value it. Yes, their goal is to serve as a more efficient alternative to Ethereum and perhaps Bitcoin on the payments front, but who cares? Shitting on a plate, cutting it up with a fork and breaking it down into small individual pieces will not lead to riches for you simply because you claim that your individual turds are superior to actual money solely based on the fact that you can transfer your turds between individuals quicker.

There are a whole lot of other things that can be said about Cardano - another time, another day.

For now - let's take a look at their on-chain metrics.

If you're reading this (now or in the future) - go ahead and click on that picture above.

This little pie graph that I'm focusing on shows us:

The distribution of wallets (by percentage) according to the total amount of $ADA that they possess.

That tiny purple sliver represents the total number of addresses that possess between 1 million and 10 million $ADA tokens.
According to our pie graph, only 1.06% of wallets possess at least that many $ADA tokens.

There's no way to quickly tell how many of those addresses are owned by the same entity - but undoubtedly, there are at least some (if but just one, even) that are owned by the same entity.

Therefore, we can conclude that the number of individuals (percentage-wise) that own $ADA in that amount (or greater) is more than likely smaller than that.

That Idea is Destroyed Though by Exchanges

Without a doubt there must be exchanges on that rich list (this is where users still keep their funds for whatever reason) ; and exchnages hold user accounts. So its possible that a large wallet (or a cluster) are representative of hundreds/thousands of individual users.

But even that may not be true because there may be whales nesting on those exchanges that have parked their funds there. Perhaps the exchanges themselves simply own most of them (this is why we need more concrete analysis in this space). With what we know how and with the tools at our disposal, we are ill equipped to resolve any of these speculations.

Additional Metrics Provide Some Clarity Though

This chart above is a pie graph that is split into regions based on what percentage of the total $ADA supply the respective section's "group" holds.
Breaking This Down:

The color purple marks every wallet that possesses 10 million or more $ADA tokens.

The chart above shows that this group represents 46% of the total supply.

Terrible Gini Coefficient ; Visually Apparent

Can't Imagine What This Would Score on the 'Gini Coefficient'

They used to run 'gini coefficients' in this space (guess that started being seen as 'rubbing it in' after BTC plunged post-2017).

Gini coefficients are a political science tool used to measure wealth disparity and distribution in countries (to draw conclusions specific to that field of study).

While BItcoin is not a country / ecosystem / culture, it does have an attached community. Also, it is a legitimate currency in a real world sense. You can buy and sell things of actual value for Bitcoin and there are a number of locations within the United States and other world-ruling nations that accept Bitcoin.

Getting to the Main Point

Gini Coefficient (wealth inequality) forecasts failure, strife, turbulence, & ultimately, an unhealthy economy / ecosystem that is stifled by a portion of its structure being able to adequately support / defend itself from the various things an actual ecosystem must survive through (Mt. Gox is one example here if I'm being too abstract ; Bitcoin's resilience + fanatic stakeholders willing to give up anything to see BItcoin succeed at that point saved Bitcoin's fucking life)

Cardano's Lack of Parity Shows a Weak Ecosystem Incapable of Resisting..Anything

Worst yet, Cardano doesn't have a fully functioning ecosystem yet, so they're doubly screwed if they can't gather enough momentum from their ecosystem to propel whatever their ideas are.

Let's look at the next chart (I know what I'm talking about - trust me - I've spoken with Charles Hoskinson directly, I've followed this project very closely as well, including its convenient and spontaneous emergence right as Mastercoin / Tether were executing stage two of the plan they had hoped to implement with Tether prior).

[There are so many skeletons in this space!]

This pie graph is a little less intuitive ( but its still simple ; don't overthink it like I did).
The red portion here represents 397 million $ADA tokens. Flat out. That's it.
The 69.88% attached to that red section stands for how many wallets (out of all wallets in existence) those 397 million ADA tokens belong to.

This metric could have been included in the first chart we looked at to reduce confusion - but we'll cut them a break since they went through the effort of even doing this.

What This Red Portion Tells Us

That percentage is roughly equivalent to the two lowest ADA-token-held ranges for the first graph we looked at:

  1. Wallets possessing 1 - 1000 ADA tokens
  1. Wallets possessing 1,000-10,000 ADA

If we modify that graph so that our 'universe' of all $ADA wallets in existence is restricted to only those two groups of addresses, then the distribution appears as such:

So, about even.

This metric is very fucking weird to me.

Explaining Why This is Weird

We saw in the initial graphs that the largest stakeholders in the $ADA ecosystem make up a very, very tiny minority of total stakeholders

However, the second chart showed us that this same tiny sliver of addresses (the super wealthy ones) possessed the vast majority of outstanding $ADA tokens

So how can it be then, that we're seeing 70% of the total outstanding $ADA supply is spread out among 70% of addresses with a balance?

Given what we just broke down above in plain English, we should be seeing the opposite.

What This Might Mean

I'm not a conspiracy theorist and I certainly don't believe in leveling wild accusations against entities / individuals just because something doesn't make sense to me personally (if I haven't yet received a response from whatever I'm speaking on).

But here may be an exception.

I'm not sure what's going on, but it feels fishy.

My Instinct

This is a complete guess, so please don't take this to the bank - but I imagine that a few large entities (exchanges or perhaps founders / leaders of the project) have automated a means of laundering / mixing $ADA coins for the purpose of:

  1. Spoofing actual on-chain activity (when there is none); remember, when you trade on an exchange, that's all on that exchange's internal ledger - not the blockchain. So if $ADA is reporting massive activity on their chain, we must believe that this activity (if legitimate) is the result of bustling activity (relatively speaking).
1a. Since Cardano is still in beta right now (releasing testnet launches) with no viable ecosystem fueling its existence apart from exchanges - there aren't many conceivable reasons for why users would be transacting with one another like this. There is no real ecosystem to facilitate such transfers. No one accepts $ADA for anything valuable, no stores want it, the cryptocurrency isn't finished & its very obscure / unknown to those that aren't at least familiar with Bitcoinand Ethereum.
  1. I took a look at Cardano's dev logs (GitHub) and also at the recent commits being made by their developers. They're making ghost updates - which is a practice in blockchain where developers essentially push commits to a project's GitHub to make it seem like they're busy at work, but the commits are minor superficial changes that do nothing to change the functionality of the project at all.

Take it from me, you can make minor tweaks to shit all day if you really want to. Adjust fonts, change values in configuration files and say you 'enhanced the project's throughput', etc.

Any legitimate team that's making legitimate improvements will log those changes via their Changelog & eventually, by release as well.

Now check this out:

This is from '' (yeah the name is weird ; but its a Cardano blockchain explorer - the site is legitimate).

According to this data here, $1.4 billion worth of $ADA was transacted on their chain within the last 24 hours.

What the Fuck?

This is more than 4x their reported market volume over the past 24 hours!

What the Fuck is Going On Here?

Again, I don't want to jump to conclusions, but these numbers (for me) amount to something extremely subversive going on with Cardano.

My Final Word on Cardano (for right now)

I hate that I have to break away from this actually because now I'm intrigued and I think this is probably one hell of a rabbit hole [hint: no one is stopping you from being the one to dig further and find where the bomb is at]

You can chuck this entire situation up to the old saying that goes something like...

Where there's smoke, there's fire



Happy to serve and help wherever I'm needed in the blockchain space. #Education #EthicalContent #BringingLibretotheForefront

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