The Shelly Upgrade, with its new rewards system, is attracting new buyers, leading to a yearly high for ADA
Cardano (ADA), the fully open-source cryptocurrency project, has surged by 85%, making it one of the highlights in the crypto market this month. ADA spiked from $0.074 to $0.137; more than 85% in about 10 days.
This led it to overtake Bitcoin Sathoshi Vision (BSV) to become the sixth-largest coin by market capitalization.
The move led to ADA hitting its highest price since June 2019 by reaching $0.1021, with its the ADA/USD pair also clocking a one-year high of 0.00001120 BTC last week.
Experts have suggested that the big price rally is fuelled by the launch of its new Shelly Upgrade.
The new Shelly Update significantly affects the price of the ADA because of its staking system. Being a proof-of-stake, Cardano will witness the introduction of a delegation and incentives scheme, a reward system to drive stake pools through the Shelly Upgrade.
The ‘Shelly code’ was released on June 30, with a node equipped with the upgrade components deployed onto the mainnet on the July 1. The complete changes are expected to be implemented on Cardano’s network through a hard fork by the end of this month.
According to Daniel Ferraro, marketing director at blockchain intelligence firm IntoTheBlock,
“The impressive price rally is likely due to optimism ahead of the much-anticipated release of the Shelly Upgrade.”
The Shelly Upgrade is designed to lead Cardano to be 50 to 100 times more decentralized than other blockchain networks. The roadmap for the upgrade released by Cardano revealed that the benefits of this will reach around 1000 stake pools.
Thus, ADA’s surging price can be majorly attributed to investors who find the new incentive system valuable.
An incentivised test net (ITN) was launched last year to allow certain ADA holders to earn staking rewards by testing the Shelly Upgrade. Simon Peters, crypto market analyst at investment platform eToro believes that this could have also contributed to the price rise.
“The price rise seen over the past couple of months was likely fuelled by the launch of staking on ITN. The ITN phase is over and the focus now is on the mainet, which will go live once the hard fork takes place later this month,” he explained.
However, the Shelly Upgrade isn’t the only factor contributing to the price rally. The recent spike in ADA’s price marked the first breakout of a crucial multi-year resistance level since 2018. It is believed that the lack of clear resistance levels above $0.17 worked in Cardano’s favour.
Further, the DeFi market just surpassed $2 billion in total value across all of its protocols. Being a proof-of-stake blockchain network, Cardano’s potential to evolve in the DeFi space might have likely attracted investors.
