Crypto

Cardano welcomes (finally) smart contracts: what future for ADA after the Alonzo update?

Cardano shows a rating: after an endless wait for those who have followed the Cardano (ADA) project since its launch in 2017, smart contracts are now embedded in this blockchain network. While 2020 had been focused on implementing staking (consensus by proof of stake), it is now decentralized application development (dApps) that is Cardano’s hot topic by the end of 2021.

Cardano ready to compete with Ethereum?

Shortly before midnight, this Sunday, September 12, the Cardano blockchain underwent an important evolution of its ecosystem. With the release of the Alonzo update, the project founded by Charles Hoskinson (also a co-founder of Ethereum) begins to be fully operational.

Project Cardano Alonzo update countdown – Source: Deadalus Wallet

Cardano now supports the famous smart contracts popularized by the Ethereum network. This also means that the developers who revolve around the project will be able to pass, on the main Cardano network, the first decentralized applications (dApps) that they previously had to develop under testnet.

Entry Exit Twitter post announcing the successful deployment of the Alonzo fork in Cardano (ADA)Publication d’Input Output – Source: Twitter

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Is everything to build in Cardano?

Behind the good news, we have to admit that the Ethereum network is way ahead in terms of use cases and applications, while Cardano has yet to demonstrate its ecosystem.

Smart contracts brought in by the Alonzo fork are allowed by Plutus Application Framework (PAF), as specified on the IOHK site:

“By allowing Plutus scripts to be written and executed on the blockchain [de Cardano], we will have the backbone of a new decentralized application platform, which will allow many use cases for dApps and decentralized finance (DeFi): from simple swap-type applications to decentralized exchange platforms (DEX), passing through more complex calculation programs , like oracles and stable coins (…) “

However, some practical problems are emerging for the first few Cardano dApps. As Decrypt mentions, for example, an early business application called Minswap was closed shortly after launch because it was having trouble processing multiple transactions at once.

Other DEXs have also reportedly delayed their launch until solutions are found to avoid this transaction bottleneck. Still, there is no shortage of volunteers to exploit this new Cardano functionality, as we can see in the table of dApps projects below.

Cardano (ADA) will launch several decentralized applications on its networkList of future decentralized Cardano apps – Source: IOHK

Among these applications, we see the decentralized exchange of the AMM SundaeSwap type, which will have the originality of launching the issuance of its SUNDAE tokens with an ISO (initial stake pool offering). Will the differences between Caradano and Ethereum be enough in favor of the challenger, for the ADA network to catch up with the blockchain queen of smart contracts?

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