With the hard fork “Alonzo”, the Cardano network has successfully completed the last part of the Goguen rollout. Before the network turns into a fertile dApp node in the new smart contract age, there may still be some initial difficulties. The market update.
The crypto market remains in cover at the beginning of the week. In a 24-hour comparison, the total market capitalization is 1.1 percent in the red. While Bitcoin and Ethereum digest moderate price drops, three Altcoins stand out among the ten largest crypto assets. Polkadot (DOT) is resisting the negative trend with an increase of around 13 percentage points. Solana (SOL), on the other hand, with a 10 percent setback on a daily basis, is 25 percent away from the record high set only four days ago. Cardano’s (ADA) start to the week is not necessarily shining either, the third largest cryptocurrency is slipping four percent south. And this despite the fact that the Cardano network received the most significant upgrade in its history on yesterday, September 12th.
Cardano heralds the smart contract era
“Welcome to the beginning of a new era”, with these words the developer company IOHK announced yesterday the successful Cardano hard fork Alonzo given. The upgrade, for which the entire crypto space has been waiting for months, went smoothly via the hard fork combinator and without chain splits. Without question, Alonzo, which now enables smart contract applications in the network, represents a milestone in Cardano’s history and could at the same time 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 enables numerous dApps and decentralized financial applications (DeFi) – from simple apps of the swap type to decentralized exchanges (DEXs) and more complex calculation programs such as price oracles and algorithmic stablecoins.
IOHK blog entry
Despite the champagne mood: You don’t want to rest on your laurels, as the team states in a blog post. Because now the “real” work begins: “The construction of a decentralized system that offers everyone and everywhere economic identity and opportunities”. With around 150 projects developing their applications through the Cardano support program Catalyst, however, “the future for the development of Cardano could not be brighter”. The following overview gives a foretaste of future projects:
“There will be bumps”
Although a new chapter is opening for Cardano, the developers throttle expectations that are too high. The “first simple smart contract scripts” would start immediately after the hard fork. However, “it would take a while before more sophisticated dApps are brought into circulation via the public test network”. According to IOHK, the stone could only really get rolling in the fourth quarter, “especially when launchpads, tools and frameworks, including the Plutus Application Backend (PAB), and APIs created by the community become available”.
Despite all justified euphoria, investors should therefore first lower their expectations a little:
There are high expectations for this upgrade. Some of them are unreasonably high. Cardano watchers might expect a sophisticated ecosystem of consumer-friendly dApps that are available immediately after the upgrade. The expectations have to be controlled here. We should remember that another well-known blockchain project that started 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 hint and probably not the last tip in the direction of Ethereum. At the same time, the developers are calling on the community to help sort out the rotten fruits of the first harvest: “As a community, we must be vigilant as our ecosystem matures”. Especially at the beginning it is “inevitable that bad actors 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”.