Deposits and withdrawals on Cardano [ADA] are to be temporarily suspended by Binance for the upcoming Valentine’s Day update of the Cardano network, called SECP.
In accordance with the blog post, ADA trading on the cryptocurrency exchange will not be impacted during the network upgrade and hard fork. The exchange will reopen deposits and withdrawals for ADA once the upgraded network is stable.
The scheduled SECP update will initially take place on the test networks from Feb. 11, before going live on the mainnet.
Its bigger rivals like Bitcoin and Ethereum utilize the ECDSA cryptographic systems. Whereas blockchain networks such as Polkadot use Schnorr signatures, which are alternatives to ECDSA.
The Cardano blockchain, on the other hand, relies on the Edwards-curve Digital Signature Algorithm [EdDSA] with the elliptic curve Curve25519 as its base curve [Ed25519].
To put it simply, EdDSA is touted to be much faster, more secure, and more compact, but not compatible with ECDSA and Schnorr.
The upcoming upgrade to Cardano is aimed to secure cross-chain DApps development and greater interoperability to the blockchain. This, in turn, will make it easy for Cardano developers to work with other blockchain networks.
In the latest announcement, Tim Harrison, VP at IOHK wrote:
Preparations have been underway for some time across the entire Cardano ecosystem. The core engineering teams at IOG and the Cardano Foundation, SPOs, DApp developers, and exchanges have performed intensive integration testing in the preview test environment since November 2022, with positive results. This technology is now close to being deployed on the Cardano mainnet.
Having said that, Cardano hogged the limelight for its recently launched DJED stablecoin. But things have not gone as planned as the token has already lost its peg to the $1 benchmark, raising concerns among investors.
Cardano’s DJED Depegging Raised Concern
Some in the crypto community have speculated that the stablecoin may have a serious problem as a result of the abrupt decline in price.
However, investors have tried to allay concerns by claiming that such price drops are nothing new and that the cryptocurrency market routinely suffers this kind of volatility.
According to experts, one reason for the drop in price could be a lack of liquidity, a common problem for new assets.
The DJED stablecoin uses a collateral method, meaning it is backed by an asset reserve. The goal of the collateral mechanism is to keep DJED’s price stable and fixed at $1. However, this mechanism needs some time to work properly, and the current price decline is a typical stage of the process.