With the hard fork “Alonzo”, the Cardano network has successfully completed the last part of the Goguen rollout. However, before the network peels off into a fruitful dApp hub in the new smart contract era, it may encounter some teething problems. The Market Update.
The crypto market remains in hiding at the start of the week. On a 24-hour basis, the total market cap is down 1.1 percent. While Bitcoin and Ethereum are digesting moderate declines, three altcoins stand out among the top ten crypto assets. Polkadot (DOT) is bucking the negative trend with an increase of around 13 percentage points. Solana (SOL), on the other hand, has rebounded 25 percent from the record high it set just four days ago with a 10 percent daily setback. Cardano (ADA)’s weekly open doesn’t exactly shine either, with the third-largest cryptocurrency sliding four percent south. This is despite the Cardano network receiving arguably the most significant upgrade in its history yesterday, September 12.
Cardano ushers in smart contract era
“Welcome to the beginning of a new era,” with these words developer IOHK announced the successful Cardano hard fork Alonzo yesterday. The upgrade, which the entire crypto space has been waiting for for months, has gone down smoothly via the Hard Fork Combinator with no chain-splitting. Without question, Alonzo, which now enables smart contract applications on the network, represents a milestone in Cardano history and could also mark a turning point in the DeFi world, which is (still) dominated by Ethereum.
With the ability to write and execute Plutus scripts on-chain, we have the backbone for a new decentralized application platform that will enable numerous dApps and decentralized financial applications (DeFi) – from simple swap-type apps to decentralized exchanges (DEXs) and more complex computational programs such as price oracles and algorithmic stablecoins.
Despite the champagne mood: The team does not want to rest on their laurels, as they state in a blog post. For now the “real” work begins: “The construction of a decentralized system that offers economic identity and opportunities to everyone, everywhere”. However, with around 150 projects developing their applications through Cardano’s Catalyst funding program, “the future for building Cardano couldn’t be rosier.” A taste of future projects can be seen in the following overview:
<img src=”//www.w3.org/2000/svg’%20viewBox=’0%200%201525%20854’%3E%3C/svg%3E” alt=’Cardano ecosystem’ height=”854″ width=”1525″ data-src=”https://yellowrocketagency.com/wp-content/uploads/2021/09/Cardano..png” />Cardano ecosystem, source: IOHK
“There will be bumps”
Although a new chapter is opening up for Cardano, the developers are curbing expectations that are too high. The “first simple smart-contract scripts” would indeed start up immediately after the hard fork. However, “it would take a while for more sophisticated dApps to be circulated through the public test network.” According to IOHK, the stone may not really start rolling until the fourth quarter, “especially when launchpads, tools and frameworks, including the Plutus Application Backend (PAB), and community-created APIs become available.”
So despite all the justified euphoria, investors should lower their expectations a bit for now
There are high expectations resting on this upgrade. Some of them are unreasonably high. Cardano watchers may expect a sophisticated ecosystem of consumer-friendly dApps available immediately after the upgrade. Expectations need to be managed here. We should remember that another well-known blockchain project that launched in July 2015 had to wait over two years before its first dApp (which had something to do with cats?) gained real user traction.
An unmistakable finger pointing and probably not the last tip towards Ethereum. At the same time, the developers call on the community to help pick the rotten fruits of the first harvest: “As a community, we need to be vigilant while our ecosystem matures”. For example, especially at the early stages, “it is inevitable that bad actors will try to gain advantages through hacks, exploits, and the like.” Therefore, investors should be vigilant and “look out for projects with a positive history of open and transparent communication, properly maintained social channels and a technical track record.”