Cardano’s Alonzo Hard Fork was successful, but real benefits may take time
Cardano (ADA) reached a key milestone in its roadmap on September 13th when its blockchain successfully launched smart contracts powered by Plutus as part of the Alonzo hard fork.
The Alonzo Hard Fork has been eagerly awaited in the Cardano community as well as in the crypto sector in general.
The smart contract functionality should enable Cardano to be a platform on which developers can create decentralized applications (DApps) and even mint unusable tokens (NFT). This milestone has been hailed as the point in the network’s development where “the real mission begins”.
However, news of the successful execution of this important milestone did not prevent the network’s native token, Cardano (ADA), from falling into the broader slump that plunged the crypto market since Bitcoin (BTC) below $ 43,000 on Sept. 7. After the Alonzo hard fork on September 10, ADA fell 10% to an intraday low of $ 2.3, while BTC and Ether (ETH) fell only 4% and 6.97%, respectively.
Marie Tatibouet, Chief Marketing Officer of the Gate.io crypto exchange, told Cointelegraph:
“That changes everything for Cardano! Cardano has long been known as a smart contract platform without smart contracts, but now critics need to change that story. With the advent of actual contracts, the usefulness and ease of use of Cardano will increase. “
Cardano developer activity among the highest
According to a report by Outlier Ventures entitled “Blockchain Development Trends Q2 2020/21” Cardano is one of the most actively developed blockchains, with the highest average monthly engagement per month in the Github code repository of 701 commits per month (CPM).
The average CPM for all protocols considered in the report is 107 CPM. These “commitments” essentially represent any additions or changes made to the network’s source code on Github.
In terms of these commits, Ethereum is in second place with 447 CPM, IOTA is in third place with 394 CPM with Filecoin and Flow rounds off the year with 368 CPM and 306 CPM, respectively. This shows that Cardano is 555% more active than Ethereum and 317% more active than the average of all connected blockchain networks.
In terms of the total number of developers building a given blockchain network, Ethereum still ranks first with 168 monthly active developers (MAD). Cardano follows just in second place with 165 MAD and shows an increase of 31.8% compared to the previous year. The network already has a function that allows NFTs to be created. According to Cardano to Cointelegraph, 780,436 NFTs were minted on the network.
Such an active developer community is proof of how quickly the network is evolving and adapting to the changing needs of the ecosystem. Cardano has a large number of developers with the highest development activities under similar blockchain protocols, thus improving the security and transparency of the network. The Alonzo hard fork introducing smart contract functionality will only drive these trends forward.
Cardano DApps are still a long way off
Although the Alonzo upgrade, part of the Goguen phase of Cardano’s roadmap, allows developers to deploy Plutus-powered smart contracts on the network, the network has not quite reached this stage yet.
While the market is confident that more than 2,000 smart contracts have been deployed on the network, only 26 Plutus-powered smart contracts are in use at the time of writing, according to data from the Vercel app, a third-party data provider that uses data from adapools.org.
There is also a market-wide perception that these smart contracts are time-limited. However, a Cardano spokesperson made it clear to Cointelegraph that the network has had timelock scripts on the project’s roadmap since the days of Allegra. These time-locked scripts are used for operations such as supporting NFT casting by having the NFTs execute unique multi-character and sample schemes. Smart contracts are very different from these scripts and cannot be placed “in the time lock”.
Hunain Nasser, Senior Analyst at OKEx Insights – the research team at the OKEx crypto exchange – told Cointelegraph:
“Timelocks are used to protect users from changes to contracts after they have been created. Not all of the 2,300 scripts seen on the Cardano network are actual applications, most of them are minting guidelines for tokens and NFTs on the Cardano network and they have been time locked to prevent changes. “
However, timeouts can be used after DApps are created and widely used. They can also be used to notify users when changes to the smart contract are triggered. This feature prevents these changes from being made immediately and gives users time to review and act if necessary before they are deployed.
It remains to be seen how quickly real benefits in terms of DApps and other decentralized finance functions can come into the Cardano network. But it can also be about managing expectations. Johnny Lyu, CEO of the KuCoin crypto exchange, told Cointelegraph that while the Alonzo upgrade was a milestone for Cardano, no lightning-fast success should be expected in a short period of time.
“Users have to be patient and developers have to do a lot of work to avoid mistakes that can lead to hacking and losing money on smart contracts.”
An example of the rapid integration of smart contracts into the network can be seen in the case of Binance Smart Chain, the most recent case being the hack of USD 12.7 million in BTC by pNetwork.
Related: DeFi hacks on Binance Smart Chain increase as TVL and volume increase
“At the same time, I believe that once launched, it will take more than two years for DApps to be fully deployed and running on Cardano, just like the Ethereum network,” said Lyu, adding, “I think the people are Everyone is ready to go right away and bring some new products and apps to users, but need to make sure they are safe. “
Since Cardano is a blockchain project that has always been focused on the basics, it can be assumed that they will only let money flow through smart contracts if they are considered secure. Five Binaries founder Marek Mahut, who ran the first smart contract on Cardano, said, “Security and scalability are key features for every developer. Cardano’s accounting technology, eUTXO, offers a new approach that makes it easier to write secure smart contracts. “
The Cardano Foundation is hosting the Cardano Summit 2021 from September 25-26. IOHK, the blockchain research and development company that powers Cardano’s infrastructure, discussed upgrade and improvement plans for smart contract functionality at the summit. It remains to be seen when the actual DApp implementation can be done on the network, but it is not an instant process.