Cardano Faces Regulatory Hurdles: EDI Aims to Provide Solutions

• Cardano network is facing regulatory challenges, after major US-based crypto exchanges delisted its native ADA token. 
• Edinburgh Decentralisation Index (EDI) is a partnership venture expected to solve the Cardano network uncertainties.

Cardano is under major regulatory scrutiny following the delisting of its native token ADA from various major United States crypto exchanges. However, there are signs of resilience as the Edinburgh Decentralised Index (EDI) has emerged to address regulatory challenges with its solid framework. Nevertheless, ADA still needs to overcome SEC’s charges.

What is Edinburgh Decentralised Index (EDI)?

EDI is a collaboration between Cardano network and University of Edinburgh. This organisation aims to measure the decentralisation level of various cryptocurrencies like Cardano, Ethereum and Bitcoin. It does so by analysing different blockchain’s layers such as the Consensus and Governance layer.

EDI provides deeper insights, analysis and complexities of developing digital assets and crypto landscapes. Its methodology consists of evaluating a crypto on the basis of its governance, tokenomics, geography, hardware, software and consensus mechanism as well. It offers an apparent assessment of the degree of decentralisation within a network, as centralisation could also impose a censorship threat to various cryptocurrency projects.

How is EDI Leverage Cardano?

Edinburgh Decentralised Index (EDI) is one of Cardano’s diligent projects that emphasises research and innovation. It incorporates a number of metrics to perform valuable insights and evaluation, strengthening Cardano’s solid regulatory foundation and establishing its position in the crypto industry.

Cardano’s founder had previously highlighted the potential of EDI in governing and regulatory bodies globally. He mentioned that EDI’s assessment of decentralization could help policy-makers differentiate between cryptocurrency protocols based on their decentralisation. According to Market Cap, Cardano is the third-largest blockchain platform and seventh-largest token, making it crucial for EDI to address SEC’s regulatory concerns and resolve the damaging impact on Cardano.

EDI’s assessment of decentralisation can empower the project’s position by promoting a secure and fair blockchain ecosystem. Its insights could lead to a fair decision process within the Cardano community in this vast landscape of crypto. Cardano’s approach with EDI’s crucial metrics like Herfindahl-Hirschman, Gini Coefficients and Nakamoto could provide a powerful assessment to evaluate the degree of decentralisation within Cardano network.

Cardano’s Recent Valuation

Cardano, like other cryptocurrencies, has its flaws as its implementation has only shown limited progress. It currently has a limited number of nodes that are too controlled by its own ecosystem. The aim of standardising protocol is still under development, and will be implemented after growth of Cardano’s use cases. However, it currently faces certain limitations.

Litecoin is also striving to reach daily transaction levels similar to Cardano. Additionally, this cryptocurrency faces significant competition from other cryptos due to its Dash-inspired governance approach. Ripple could be a potential competitor  as it pursues the same goal of bridging cryptocurrencies with existing financial systems.

Conclusion

According to Charles Hoskinson, the founder of Cardano, the Edinburgh Decentralization Index (EDI) could serve as a potential bridge between regulatory bodies and decentralised crypto assets. It could be a perfect tool for policymakers to analyse a cryptocurrency’s commodities and security. Leveraging the power of EDI could possibly address Cardano’s uncertainties and can resolve this blockchain’s challenges.