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Cardano Alonzo Hard Fork: Implements Plutus Smart Contracts

Cardano recently has forked its network to launch Plutus smart contracts. The hardfork took place on Sunday 12th September at 21:44 UTC at Epoch 290 and introduced a brand new network. Cardano has entered a new development phase after initiating Alonzo on mainnet.

Alonzo saw Input Output, the core development team working on Cardano, integrate Plutus scripting for smart contract programmability. Over the last few months, Input Output has continuously been testing Alonzo in preparation for the hardfork.

The Alonzo hard fork is a major upgrade on the Cardano network that sees the much-anticipated implementation of smart contract functionality. Smart contracts are pieces of computer code that automatically execute when certain predefined conditions are met. With the Alonzo update, anyone will be able to create and deploy their own smart contracts on the Cardano blockchain, paving the way for native decentralized applications (dapps).

The system update, signifies the end of the Shelley era of Cardano and the beginning of the Goguen phase.

The eras of Cardano

Cardano’s development road map is divided into six main stages, or “eras,” each focused on expanding the functionality of the network.

  • Byron - Sets up the foundation code of Cardano. Allows users to exchange the cardano (ADA) currency, named after revolutionary programmer Ada Lovelace, and mine ADA with their proof-of-stake consensus algorithm.

  • Shelley - Focuses on decentralizing the network by setting up incentives for users to host their own nodes. The main goal of this era is to make sure the nodes, or individual computers, are run by a diverse group of network participants rather than a small, centralized group of users.

  • Goguen - Introduces smart contract capabilities to the network allowing developers to create decentralized applications on top of Cardano.

  • Basho - Improves the underlying performance of the Cardano network to be able to process more transactions and scale up. This era also introduces side chains, which is a means of scaling a network using multiple blockchains.

  • Voltaire - Adds a voting and treasury system for self-sustaining governance. Users will be able to stake their funds to influence future development on the network.

The Alonzo Hard Fork update is an important part of various stages of Cardano’s development. Out of the 5 stages, Byron, Shelley, Goguen, Basho and Voltaire, Cardano has reached the Goguen era, which had to bring in smart contracts.

The Alonzo update empowers Cardano with smart contract capabilities and it will help in improving its functionality in the following ways:

  • The upgrade is supposed to pitch Cardano against its competitors Ethereum and Solana.

  • It would help Cardano deploy DeFi apps for widening its ecosystem. Cardano has currently 150 projects developing their ideas via Cardano’s Project Catalyst innovation program.

  • The update would allow inclusion of Plutus scripts, which uses simple functional language like Solidity or Haskell, and allows users to put scripts on chain or on blockchain ledger

While Shelley era decentralised the core of the Cardano system, Goguen era offers following capabilities besides giving smart contracts according to the Cardano Foundation:

  • Build decentralised applications (DApps).

  • Add a multi-currency ledger that will extend the usefulness of Cardano, to create new natively supported tokens.

  • Creation of NFTs, new cryptocurrencies and many digital and physical assets on Cardano.

The Alonzo upgrade sets Cardano on the path to enabling a host of new use cases such as DeFi. However, it’s likely to be some time before the network hosts a thriving ecosystem of dApps, partly due to scaling concerns.

The Cardano-based decentralized exchange Minswap ran into problems as a result of the network’s concurrency issues when it tested smart contracts last week. Concurrency problems have been attributed to Cardano’s method of settling transactions, known as Extended Unspent Transaction Output (EUTXO).

Teams from projects such as SundaeSwap, Maladex, and OccamFi have already begun work on scaling solutions to achieve adequate concurrency for their dApps. When those solutions are implemented, it is hoped that the network will support a thriving DeFi ecosystem. Decentralized exchanges, launchpads, and NFT marketplaces are expected to go live in the coming months.

The Alonzo update has three levels, Alonzo Blue, Alonzo White and Purple. In each stage, developers will have to remove bugs before officially moving to the new era.

Alonzo stages

The Alonzo hard fork is split into three main color-coded phases.

  • Alonzo Blue

  • Alonzo White

  • Alonzo Purple

There are also two smaller phases post-Alonzo Purple dubbed “Alonzo Red” and “Alonzo Black.” Each phase essentially adds more users to the testnet and identifies bugs that may need to be fixed. Alonzo Blue introduced smart contracts with around 50 technical participants, mostly stake pool operators (SPOs). Invalidation errors and other simple fixes were found and tweaked during this phase. These standard bugs are expected to appear and be fixed as Alonzo goes through testing. Alonzo White adds more features and a wider range of participants to Alonzo Blue. The hundreds of new users will be run through a sort of “exercise boot camp” that will test the capabilities of the network. This experiment is being done by IOG; the main development company behind Cardano led by former Ethereum co-founder Charles Hoskinson. The company expects this phase to last around two to four weeks. Alonzo Purple will become a fully public testnet and on-board thousands of participants to the network. This particular stage is split into two distinct phases, “light purple” and “dark purple.” The first will allow for simple smart contracts, while the latter will allow for more complex smart contracts. Then comes the final Alonzo Red/Alonzo Black color phases, which are reserved for final bug fixes/cleanup to prepare the final release of the hard fork. Any future tweaks to the hard fork will be very difficult to make past this point, and so it is important that these two phases are looked at very carefully.

Staging adds quality assurance, as code is frozen and exchanges are prepped for the Cardano hard fork. Alonzo Mainnet officially launched the final code.

Added Cardano Roadmap on our website to help you quickly understand various operation progress as Cardano implements its plans in five eras i.e. Byron, Shelley, Goguen, Basho and Voltaire.


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