Cardano will be developed in five stages, each of which is named after well-known poets or computer scientists. After the successful Alonzo update, Cardano will compete with other decentralized finance ecosystems including Ethereum, Binance, Polkadot, Solana, and others in the expansion of the industry.
Alonzo to Bring New Capabilities to Cardano
Alonzo mainnet deployment will take 90 days and will be divided into three phases: blue, white, and purple. Each phase will grow in size, adding more users as well as new functions and features. Cardano with smart contracts functionality is scheduled to be operational by the end of August 2021. The Alonzo announcement on Cardano’s development site mentioned that the upgrade will provide interesting new capabilities. It stated:
“The ‘Alonzo’ hard fork will bring exciting and highly-anticipated new capabilities to Cardano through the integration of Plutus scripts onto the blockchain. These will allow for the implementation of smart contracts in Cardano, enabling the deployment of a wide range of new DeFi applications for the first time.”
Alonzo is part of a series of Cardano blockchain updates that will add a smart-contract capability to the blockchain for the first time, allowing for the implementation of a wide range of decentralized finance applications. Input-Output Hong Kong’s founder, Charles Hoskinson, believes this will be the busiest time in the company’s history. He said:
“This is probably going to be the busiest 90 days in my company’s history and the ecosystem’s history. I’m not saying 90 days after this video, Alonzo will be on the Mainnet. What I’m saying is the most critical engineering path, integration path, coordination path, and community path are for the next 90 days.”
What to Expect from the Launch?
Cardano has reached a critical milestone with the implementation of smart contracts, which will ultimately make the blockchain a credible competitor to Ethereum. Since last summer, Ethereum’s decentralized financial (DeFi) ecosystem has grown significantly, based on a diverse set of decentralized applications (Dapps) that are all built on smart contracts.
Cardano will now have the same functionality. The Cardano developers, for example, have offered a Cardano-native Dapp that allows users to swap multiple tokens, similar to Ethereum’s “killer Dapps” like Uniswap.
The smart contract integration into Cardano’s network, codenamed Alonzo, has had a beneficial impact on the native token ADA, to say the least. In February, a 270% bump was given in preparation for the Mary hard fork in March. This successful upgrade added multi-asset native tokens to the Cardano blockchain, as well as the foundation for fungible and non-fungible token transactions (NFTs).
The impending Alonzo hard fork falls midway in the center of Cardano’s roadmap, signaling the conclusion of the Shelley era, with the Allegra hard fork at the end of 2020 and the start of the Goguen period.
As a result, Alonzo will usher in the Goguen period as the first hard fork. The most current update, dubbed Daedalus, was released on April 1. It allowed users to access their ADA tokens through a simple interface while also allowing them to hold all Cardano-native tokens.
A Comparison With Ethereum
DeFi Pulse estimates that the entire value locked in DeFi is currently near $53 billion. Meanwhile, Ethereum’s smart contracts are used by large platforms like MakerDAO, Compound, Aave, and many others. Cardano will be able to enter this multibillion-dollar sector as well with the debut of Alonzo.
Cardano’s latest upgrade, nicknamed Mary, introduced the option for users to generate unique tokens in early March, bringing the blockchain much closer to Ethereum. As a result, Cardano has evolved into a multi-asset network capable of supporting a wide range of cryptocurrencies.
Cardano, unlike Ethereum, does not use smart contracts for token transactions. This means that transfer fees on Cardano could be significantly lower than on Ethereum, which are still skyrocketing.
For example, according to Blockchair’s data, the average transaction cost on Ethereum recently hit a new all-time high of $43 on February 23. It’s sparked disputes over whether Ethereum is becoming too expensive to use, and rivals like Cardano are promising smart contracts and reduced transaction costs, so the fight is only going to get more heated.
So with Alonzo coming up, the month of August will be crucial for Cardano and its native crypto token ADA. Even though the crypto space is going through a major market-wide correction right now, the launch is expected to boost the price of the token to new heights. Cardano would be in a much better position now if smart contracts had been adopted at the start of the year. Cardano and Ethereum are now working on updates that are only a few months apart.