Cardano Nears $681.9M ADA Treasury Transfer in Decentralization Push

• Cardano’s treasury valued at almost $681.9 million is on the verge of being transferred to the community to finalize its decentralization process. 

• Growing treasury reserves have been linked to increasing network activities with the funds accumulated from transaction fees. 

A top Cardano (ADA) analytics platform TapTools, has noted a strategic move which underscores Cardano’s relentless interest in decentralization and participative governance. As captured in a snapshot from TapTools, Cardano’s treasury which comprises ADA tokens, valued at almost $681.9 million is approaching a monumental milestone through an impending transfer of the treasury control to the community. 

According to experts, the structure of the Cardano ecosystem is one of the core supports of the future sustainability of the project. In this case, the decision to hand over control to the community is an important part of its development, and it is based on the concept of decentralization. Unlike other blockchain protocols which have their treasury filled with a variety of stablecoins and other digital assets such as Bitcoin and Ethereum, the Cardano treasury consists solely of the ADA token. 

Speaking on the growing treasury reserves, observers believe that this is a reflection of an increase in network activities. According to our research, the treasury is used to incentivize application growth within the ecosystem. Also, the accumulated funds are derived from transaction fees and are a part of the block reward.

With this happening, it is important to note that Cardano operates under a three-tier governance system. With this, the Cardano Foundation operates at the top and focuses on platform development and marketing. Input Output Global (IOG), known as IOHK takes care of the research and development Initiative for Cardano, with EMURGO focusing on business opportunities. 

Impact of this Initiative by Cardano

Experts find Cardano’s focus on decentralization treasury as one of the breakthroughs in the blockchain space as it sets a precedent for other projects and demonstrates the importance of the community at the centre of fund management. 

Fascinatingly, this development comes at the time anticipation builds around the upcoming “Chang” hard fork which is expected to finalize the decentralization process. According to Cardano founder Charles Hoskinson, the Voltaire era would seal the community governance and address concerns of the blockchain future. 

Per our checks, this groundbreaking initiative would empower the Cardano community with a significant influence to enable token holders to propose and vote on projects for funding from the treasury. In this case, active participation and democratic decision-making would be encouraged. 

Amid the backdrop of this, ADA is facing a substantial price decline after falling below the 20-day Exponential Moving Average (EMA) last week. At that time, the price declined by 10% to sit at $0.41 with no movement recorded as of press time. In the last seven days, ADA has declined by 6% and also fallen by 14% in the last 30 days. 

The drop below the 20-day EMA indicates a substantial decline in buying pressure and a significant increase in sell-off. Analyzing the ADA’s daily transaction volume using the seven-day moving average shows a profit-to-loss ratio of 1.01. According to IntoTheBlock’s data, 3.04 million addresses, representing 68.06% of ADA investors are holding the asset at prices higher than the current market value. This implies that only 30.38% of ADA holders are in profit.