Key Takeaways
- AdaSwap has raised $2.6 million to build the first functioning decentralized exchange on Cardano.
- To circumvent the scalability issues related to Cardano’s EUTXO-based design, AdaSwap will build on a Layer 2 protocol.
- AdaSwap also plans to launch an NFT marketplace called ADANFT.
AdaSwap, a new ecosystem builder on Cardano, announced Tuesday that it had raised $2.6 million to build “the best, decentralized exchange on Cardano.”
AdaSwap Raises $2.6M to Build First Working DEX on Cardano
A new decentralized exchange project is hoping to overcome Cardano’s scalability issues.
AdaSwap, a project aiming to build an NFT marketplace and the first working decentralized exchange on Cardano, announced Tuesday that it had raised $2.6 million in a funding round led by angel investing platform iAngels. Multiple venture capital firms and individual investors have participated in the round, including Shima Capital, Pluto Digital, GBV, Stardust, and actress and producer Gal Gadot.
According to a Wednesday press release, AdaSwap will use the funding to “deliver on its goal of building the best, decentralized exchange on Cardano.” Despite being the ninth-largest cryptocurrency on the market, Cardano has lagged behind other competing Layer 1 projects in ecosystem development. Its blockchain is EUTXO-based and architecturally much closer to Bitcoin than to Ethereum, meaning it’s significantly harder to code smart contracts and build scalable decentralized applications on it.
As a result, Cardano is yet to see its first functioning decentralized exchange, even though such applications have existed and functioned seamlessly on other Layer 1 blockchains for several years now. Instead of taking Cardano’s concurrency issue head-on, AdaSwap has decided to build its decentralized exchange on a Layer 2 protocol. “By building our smart contracts on a Layer 2 solution for Cardano, we are able to bundle and process transactions on the Layer 2 while eliminating the long processing times that SundaeSwap is suffering from,” AdaSwap told Crypto Briefing.
While Adaswap is building a workaround for Cardano’s EUTXO problems, it is not the first decentralized exchange to launch on the network. SundaeSwap, another prominent decentralized exchange to launch on Cardano, has faced congestion issues due to transaction throughput limitations imposed by the Cardano-specific issue of “concurrency.” Concurrency refers to the ability for multiple different agents to interact with the same smart contract simultaneously. On Cardano, this ability is very limited, making it difficult for developers to build applications that rely on higher transaction throughputs to function properly.
“Sundae went live knowing the issue, while we pivoted our development seeing the delays from the Cardano Foundation regarding a fix or the Hydra update,” added AdaSwap. Further commenting on Cardano’s architectural limitations, the team responded positively, saying:
“Cardano’s UTXO model is very exciting for us; there are a ton of decentralized applications that haven’t been thought of yet that can be created on it in a very efficient way. With that said, traditional dApps as we’re used to from other blockchains, for example, EVM-based ones, have a lot of differences that don’t allow for easy dApp porting.”
AdaSwap said that it has a “complete solution” for its NFT marketplace ADANFT and “a way around” Cardano’s concurrency issue for its decentralized exchange. Since launching the Alonzo smart contract upgrade last September, Cardano’s native token ADA has plummeted 69% from its all-time high price of $3.09 to its current price of $0.94.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
What is Rarible: A DAO for NFTs
What was once dismissed as a silly and expensive sector, NFTs give creators access to global markets in a way that’s never been possible before, and it’s all thanks to blockchain.Those familiar…
Cardano Announces dAppStore for Certified DeFi Applications
Input Output (IOHK), the development company behind Cardano, has announced the upcoming store for decentralized applications on the network, called Plutus dAppStore. In this storefront, developers will be able to…
Cardano Ecosystem Receives $100M to Fund DeFi, NFTs
Emurgo has announced it will contribute $100 million to a fund focused on DeFi, NFTs, and education for the Cardano blockchain. Emurgo to Support Cardano Ecosystem Emurgo, the commercial arm…
Cardano’s Smart Contracts Face Major Scalability Issue
Cardano, the third-largest cryptocurrency with a market cap of over $82.8 billion, has become the subject of criticism as its ecosystem infrastructure does not allow for the most basic decentralized…
SundaeSwap Promises First Functional DEX on Cardano
SundaeSwap, a decentralized exchange (DEX) on Cardano, has launched as a public testnet. This is the first time a project has leveraged Cardano smart contracts to exchange tokens successfully on…
Source: https://cryptobriefing.com/new-cardano-dex-hopes-to-overcome-chains-scaling-woes/?utm_source=main_feed&utm_medium=rss
