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As a person who are deciding to buy some ADA currency, what I am getting in return?

So far using ADA I can have:

  1. Voting rights (governance)
  2. Ability to run a pool
  3. Grow your voting power through delegation rewards

Cardano has established community, company and the leader behind it.

It was not designed to be used as a stable coin so the value is volatile by definition.

Holding ADA is different from owning shares of a public company.

So what are the value behind ADA except the reasons listed above and price speculation on exchanges?

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  • 1
    Is there such an existing "calculus" for gold, or wheat, or oil ? And for traditional fiat currencies ?
    – Stephane Rolland
    Apr 27, 2021 at 15:32
  • Yes, there is an intrinsic value you can calculate to estimate price of those goods. You have to estimate amount of work you need to perform to mine gold, harvest wheat or oil. Then you divide the harvested amount by resources you've spend - there you go, some basic value of goods without any interest / taxes / market interest etc on top of it.
    – FelikZ
    Apr 27, 2021 at 15:37
  • ok, that makes sense for goods, although markets can even make oil having a negative value if there are too much stock that cannot be stored due to a pandemic. And for fiat currencies ? I guess you would use something like GDP ?
    – Stephane Rolland
    Apr 27, 2021 at 15:51
  • IMO, fiat currency have 0 intrinsic value but its extrinsic value purely socially justified. People have some consensus agreement, based on what they can afford and willing to pay. ADA on other hand, limited in supply, require infrastructure / electricity to survive. But there nothing much you can buy spend it to (yet).
    – FelikZ
    Apr 27, 2021 at 15:56

4 Answers 4

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This is very subjective and can only be answered from an opinionated position. With that, it has value, IMO because it has

  • been developed by a very methodical, mathematical, and scientific method
  • derivative tokens which are "native", compared to Ethereum, where tokens are implemented via smart contracts – this has one major implication (among other benefits): transaction fees are a small fraction; no "gas" fees are required to execute a contract
  • a dedicated and sophisticated, and ever expanding, ecosystem of people and companies working to solve real problems, create valuable businesses, etc.
  • outreach programs targeting new developers, governments, and education
  • a treasury system where regular rounds of Catalyst fund winning Cardano-based projects via grants
  • smart contracts that can be mathematically verified, enabling greater trust in the proper handling of funds
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  • I don't think this answers the question. It is not necessarily accurate and there are non-subjective answers. Market dynamics and the game theory behind the ADA token is different to irrational crypto markets.
    – Beeblebrox
    May 4, 2021 at 3:49
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The value of an ADA is based on the market worth of the Cardano platform. The market worth of the platform grows as more blockchain-based services are added to it and are reliant upon the performance & features of the Cardano blockchain.

The growth and popularity of the applications of these services - eg. identity services, education checks, NFT services - will ultimately be what decides how valuable the Cardano platform is. This is why native multi assets is a big deal as it allows quick development & scaling of blockchain services upon the existing decentralised Cardano network.

Because the PoS nodes are paid for their efforts in ADA (even when processing assets that aren't ADA tokens), the value of ADA increases as more tokens, applications and services are dependant on the functionality provided by Cardano and the stakepools.

So to answer the question 'what do I get from buying ADA', the answer is an asset that will hopefully increase in value.

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Ada cryptocurrency is used to access the Cardano platform. Cardano platform is used to build smart contracts and decentralized applications. The value of the Ada token is derived from utility.

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At the end of the day, it's the market that determines the value of a cryptocurrency.

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