Explore How Cardano Has The Potential To Redefine DeFi

By employing blockchain technology, Cardano (ADA) claims to solve real-world problems. It has, for example, working with the Ethiopian government to monitor the educational progress of 5 million youngsters on its network.

Students will receive a tamper-proof academic record as a result of the initiative, which might be useful if they are looking for work or considering studying abroad.

Cardano has taken a planned approach to its development. The team believes in comprehensive research and testing prior to deployment. This is why Cardano’s Alonzo Hard Fork took some time to be deployed on the mainnet. Alonzo Hard Fork is Cardano’s third major update in the Shelly Era. The currency has five primary stages of development, commonly known as “eras” – Byron, Shelley, Goguen, Basho, and Voltaire — all of which will improve the overall functionality of the network. The platform’s final important improvement during the Shelley period, Alonzo, ushers it into the Goguen era.

The Alonzo update has three stages: Blue, White, and Purple. They will be followed by Alonzo Red and Alonzo Black, who will add more people to the networks and fix any problems that have emerged. Alonzo Blue will add smart contracts to the network, similar to those present on the Ethereum network. Cardano’s smart contract capabilities are a huge step forward, letting it compete with other programmable blockchains and greatly expand the range of solutions available to its partners.

So, How Will Cardano be Any Different?

Cardano has a unique development environment, not merely in terms of speed and decentralization. As with Binance Smart Chain and Polygon, most Ethereum rivals use the Ethereum Virtual Machine (EVM), meaning they can run Ethereum code without any alterations. Solidity is a programming language similar to Javascript used for Ethereum and EVM-based networks.

For the time being, Cardano will not support EVMs

Developers will have to build smart contracts in Plutus, a new and easy smart contract language, as well as Haskell, a programming language that has been around since 1990 but has yet to gain mainstream use. The use of Plutus, rather than Solidity, is fundamental to the development of Cardano’s ecosystem. On the one side, this suggests that Ethereum dApps like Uniswap, Aave, Compound, or any Ethereum dApp, will be difficult to port to Cardano. As a result, some users may be reluctant to move to Cardano in the early going because of a lack of liquidity.

While Binance Smart Chain’s EVM compatibility indicates that all of its key dApps are clones of current Ethereum dApps, Cardano offers a fresh start for developers and users alike and is expected to have unique and never-before-seen apps. The initial development may be slow, however, we may anticipate seeing the next generation of DeFi developed on Cardano, which may lead to the development of the next Uniswaps and Aaves, as well as additional applications that have yet to be envisioned. Furthermore, it is likely that we will witness fewer application hacking incidents as a result of Plutus’s enhanced development simplicity as well as its built-in security verification techniques.

Additionally, yield farming has been quite lucrative. Governance token projects must entice users to use not only their platform but also Cardano; consequently, they will reward tokens for basic tasks like holding ADA, providing liquidity on their platform, or even taking out loans. Developers and users alike will benefit from the new Cardano DeFi ecosystem, which contains a whole new smart contract environment replete with its own unique tokens, projects, and features. The additional benefit now is the wealth of information and expertise that Ethereum lacked when it first launched.

Wrapping Up

Cardano and ADA’s value may not rise to Ethereum’s, but the competition in the smart contract sector is a good thing since it pushes all projects to improve their products and services for the benefit of their users.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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