Analyst Calls Cardano A ‘Ghost Chain’ Amid Disappointing Network Metrics

Cardano’s price action has been trending downwards alongside the rest of the crypto market, but the on-chain side of things shows the blockchain activity is failing to keep pace with expectations for a top-tier blockchain. 

Recent weeks have shown sluggish participation across key network indicators, and the stagnation has increased the long-standing ghost chain narrative. An example of this criticism came from a crypto observer on X, who added a more blunt assessment of why the network appears to be underperforming, calling it a “ghost chain.”

Harsh Critiques Point To Liquidity And Usage Weakness

A closer look at Cardano’s liquidity profile revealed gaps that are difficult to ignore. Its stablecoin supply of just over $30 million is exceptionally small for a blockchain with a market value in the tens of billions, making Cardano’s DeFi economy shallow compared to both its peers and even smaller networks. 

A crypto observer known as hantengri on X summarized the situation in a pointed breakdown, stating that Cardano raised $62 million, generates zero revenue, processes only about one transaction per second, and hosts an ecosystem that is described as basically one DEX and one lending protocol that maybe seven people use per day. 

The account went further, arguing that the chain operates like a ghost network guarded by a fanatical community despite sitting at a fully diluted valuation of $21 billion.

He also highlighted concerns about supply mechanics, noting that although ADA is labeled as having a fixed supply, roughly 18% is still not in circulation, and staking rewards along with treasury emissions continue to enter the market without any burn mechanism. To him, these factors reinforce the idea that no one is using the chain in a meaningful way.

A More Practical Way To View The Ghost Chain Debate

The idea of Cardano being a ghost chain is not as straightforward as a simple yes or no. The label comes from doubts about whether the network’s growth matches the scale of its ambitions and the size of its market capitalization. 

When the conversation is framed purely around visible activity, such as the total value locked in its DeFi protocols, active applications, or stablecoin liquidity, Cardano does fall behind faster-moving competitors like Solana and Avalanche. Those surface-level metrics make the ecosystem appear quieter than what one would expect from a top-tier chain.

Interestingly, Cardano founder Charles Hoskinson had addressed this disparity, noting this is due to a lack of DeFi engagement from the 1.3 million users who are actively participating in Cardano staking.

According to data from DeFiLlama, the Cardano network currently has the 25th largest TVL, with only about $215.51 million in 61 protocols. 

At the time of writing, Cardano (ADA) is trading at $0.1581, down by 0.5% in the past 24 hours. The cryptocurrency is down by 10% and 18% in the larger seven-day and 30-day timeframes. Charles Hoskinson recently appealed to the community to avoid reacting emotionally and to refrain from panic selling.