Researching and understanding crypto projects is essential to becoming a successful investor or trader. Since each cryptocurrency has unique features, it can be used differently by the user to maximize its core infrastructure. For example, people invest in Bitcoin for its institutional adoption, while they prefer Ethereum for technological advancements.
So, comparing coin projects is helpful. Choosing assets with different features and similarities can shape perceptions across tokens, which is why we’ll break down Cardano and Ripple in the following sections. Both are large-cap cryptocurrencies and have grown significantly in the past years.
For example, based on the most recent ADA price prediction, we can forecast an amplifying demand considering its uniqueness. At the same time, Ripple’s XRP bloomed since the settlement with the SEC (Securities and Exchange Commission) was finalized.
So, while each can provide great opportunities, let’s explore them more in-depth.
Cardano is the first ledger based on peer-reviewed research
Ethereum co-founder Charles Hoskinson launched the Cardano project in 2017, drawing inspiration from Bitcoin and Ethereum. However, it employed a unique approach, utilizing peer-reviewed research through the Ouroboros consensus mechanism. Therefore, it gathers teams of computer scientists and cryptographers to manage a decentralized network that’s highly scalable and sustainable.
Cardano uses the ADA name for its native token, in homage to Ada Lovelace, a 19th-century mathematician, further highlighting the project’s emphasis on science. The unique proof-of-stake Cardano leverages is one of the most energy-efficient, in which validators stake their ADA assets to sustain the network’s well-being.
Cardano works on two layers:
- The Cardano Settlement Layer (CSL) supports the process of validating transactions;
- The Cardano Computing Layer (CCL) ensures app computations run successfully through smart contracts;
Ripple is the financial infrastructure of the future
Ripple is the mother company that created XRP in 2013, and focuses on custody and stablecoin solutions for businesses. Its aim is to help institutions reach a higher level of security and compliance by offering technology for instant payments and asset tokenization, making it suitable for crypto businesses, payment service providers, as well as banks and FinTechs.
XRP, the native cryptocurrency, resides on the XRP Ledger, a blockchain designed specifically for businesses. It’s based on a global community (developers) who contribute to high performance and streamline development. They prefer the XRPL for app development for its decentralization, low costs, and proven reliability.
XRP is establishing new use cases through:
- Automated Market Makers that ensure liquidity and can offer the opportunity for passive income;
- Transaction Hooks is a feature that will support business logic integrations for developers;
What’s the general investor sentiment between ADA and XRP?
While AD has grown at a slower pace, it has not been involved in any negative news in the crypto market. Indeed, it adopted a compliance-friendly approach, and its academic origins helped it respect policies and maintain a positive image among institutional investors.
Unfortunately, XRP was part of a process in which the SEC filed a lawsuit regarding its categorization as either a security or not. In 2020, the SEC stated that Ripple was selling XRP as an unregistered security on secondary markets, marking one of the most challenging legal battles in the crypto industry. Eventually, the SEC and Ripple dropped their legal appeals, which ended the issue.
The problem is that the lawsuit affected the value of XRP and its appeal to investors and traders, which shows the impact of the lack of regulations and a clear outline regarding cryptocurrencies. Luckily, regulation is improving, at least in the US, especially with initiatives like Project Crypto. According to Binance.com Research, “With Project Crypto, the SEC is finally acknowledging what the market has long argued – most crypto assets are commodities, not securities.”
Pros and cons for ADA vs XRP
Generally speaking, ADA is an interesting tech project that might thrive in the future. Its strengths comprise the following:
- Energy-efficient model through the unique PoS consensus;
- High scalability that doesn’t compromise speed;
- An active and engaged community;
At the same time, ADA has some weaknesses as well:
- Struggling to attract developers considering the slow development cycle;
- Massive competition from ledgers like Ethereum and Solana;
- An underdeveloped DeFi infrastructure that impacts liquidity;
XRP, on the other hand, had more time to establish itself on the market and provide the following benefits:
- Real-world utility due to strong market demand;
- Low fees and fast transactions that led to institutional adoption;
- A deflationary mechanism that reduces supply and increases value;
Still, XRP struggles with the following:
- Centralization concerns due to the control of pre-selected validators;
- A continuous regulatory risk that may appear again;
- Competition from assets like XLM (Stellar);
Which one should users invest in?
When it comes to investments or trading, users could leverage both coins to benefit from their high demand. Indeed, XRP is a few steps ahead of ADA due to its numerous use cases for companies. However, ADA has the potential to bridge the future of app decentralization and development, so it might be a good idea to hold it for the long term.
Introducing them to the portfolio for diversification is advisable, as they focus on different sectors, allowing them to complement each other’s highs with lows. Trading would be more appropriate in the case of XRP, especially since its prices have been affected by news of the SEC.
Regardless, users should be mindful of supporting their portfolio with stablecoins like Bitcoin and Ethereum. Despite their volatility, which is inevitable in the crypto market, these assets proved secure during challenging times, making them imperative to hold in every portfolio. They help leverage assets like ADA and XRP, in addition to leading coins, to assess the complete balance between security and income.
Final considerations
Cardano and Ripple are two of the leading altcoins in the market, distinguishing themselves through their unique features. While ADA is backed by research and knowledge from computer scientists and cryptographers, XRP is laying the base of a decentralized and efficient financial future for companies. Together, they contribute to a vast crypto ecosystem, but might provide benefits for different use cases.
