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Great expectations, but also great skepticism about smart contracts

Apart from the recent crypto crash on #BitcoinDay, which pushed the price of the ADA token well below the 2 euro mark, Cardano is facing major challenges. Because on September 12th, the long-awaited smart contracts will come onto the Cardano blockchain – and better position Charles Hoskinson’s project for future DeFi applications.

The so-called “Hard Fork Combinator” event (HFC) has now been confirmed by the company IOHK (short for Input Output Hong Kong) around Hoskinson. Also known as the Alonzo upgrade, big changes are promised. “The Alonzo HFC event will be the most significant upgrade to date and lay the foundation for an exciting new era of smart contracts on Cardano,” says IOHK. “Remember, this may be the end of a long journey. But it is the beginning of an exciting new phase in our development as a smart contracts network. “

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Building a developer community

Smart contracts are considered central so that developers and other companies can use the Cardano blockchain to build their own decentralized apps. Ethereum and, most recently, Solana have shown how such Layer 1 networks can create a strong developer community around them. The more applications run on a blockchain, the more intensively it is used, and the more sought-after are the native tokens, which are usually used to pay for the transactions.

Cardano is also planning to bind blockchain developers more closely. Therefore, shortly after the launch of the smart contracts on Sunday, the “Cardano Summit 2021” will take place on September 25th and 26th. There are still no major items on the program – Hoskinson probably wants to present many new partners for the ecosystem as part of the event.

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Problems plague the blockchain

But whether Cardano will be able to take off with the smart contracts remains to be seen. Because there is currently a conflict among observers and experts as to how well this can work technically. “Cardano was not designed for the current DeFi landscape,” Eric Wall, chief investment officer at the crypto fund Arcane Assets, told Decrypt. “As it stands, it will require tons of workarounds for developers to build certain types of DeFi shared applications.”

A well-known problem that emerged in the testnet concerns the “concurrency”, ie the simultaneity of processes. Difficulties in the simultaneous use of the protocol by several users are said to have been observed. In the worst case, this would mean that Cardano only correctly manages one transaction per block. One of the first Cardano-dApps that ran in the test network had to be switched off because of the problems, namely a decentralized exchange called Minswap. Mockery also came from Ethereum developers who denounced the backwardness of Cardano technology. Charles Hoskinson, in turn, countered and tweeted of “Noise and FUD.”

In any case, from Sunday you will see how well the Smart Contracts work at Cardano and whether many developers are getting involved with the platform. Cardano’s market capitalization is 61 billion euros – significantly less than Ethereum (325 billion euros), but also significantly more than Solana (38 billion euros).

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Hasan Sheikh
Hasan, who loves technology and games, is studying Computer Engineering at Delhi JNU. He has been writing technology news since 2016.


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