Can Alonzo realize Cardano’s dream of becoming an “Ethereum killer”?

Cardano’s latest update, Alonzo, will bring DeFi and Dapps to the network. For many people, this upgrade has once again strengthened Cardano’s low-rate and high-speed competition model.

Cardano was founded in the same year as Ethereum

Although Cardano and Ethereum were founded in the same year, the development of Cardano has been relatively slow due to its peer-reviewed implementation structure.

The latest Alonzo update aligns Cardano with Ethereum again, adding smart contracts and DeFi functions.

Since its establishment in 2015, the Ethereum network has been the dominant platform for cryptocurrency companies. The combination of its smart contract and ERC-20 token allows anyone to create their own token on top of the Ethereum infrastructure, and it is here that DeFi was born.

Everyone will be familiar with the following story. A series of Defi protocols have begun to compete to create their own version of the Ethereum ecosystem. The fastest imitators are Solana, Tezos and Near, which have been trying to attract developers to develop on their platforms. The one who is truly ambitious and trying to create an Ethereum alternative project is Cardano. It was also established in 2015, but Input Output Hong Kong (IOHK), the company that oversees Cardano’s development, was not eager to launch new features. Instead, it started slowly adding features after completing large-scale testing and peer review.

It has been six years since Cardano was founded. Cardano’s Alonzo upgrade is about to add a large number of new features, bringing it closer to the goal of Ethereum’s direct competition.

First of all, we need to understand the difference in the way Cardano develops the network.

Although most networks use traditional software development models, introduce new features, and are implemented and voted on by major developers, Ethereum is a good example. Cardano chose the peer review method, which is very common in academia. Each new feature will be peer reviewed through IOHK because the company is cooperating with several universities for research and development.

Therefore, the development of the network is divided into different stages.

On September 29, 2017, Cardano was released to the public for the first time. This stage is called “Byron” and only supports ADA transactions.

The next phase, Shelley, will be launched in July 2020. It improves the decentralized structure of the network and allows holders to pledge ADA on the proof-of-stake network.

The third stage, Goguen, will increase support for smart contracts and token issuance. It will expire in August 2021.

The final stage is Basho and Voltaire, focusing on scaling up and dealing with on-chain governance. No specific date has been set yet.

Cardano is currently in the Goguen stage. At the time of writing, the network has undergone the Allegra hard fork, which requires tokens to be locked in order for participants to participate in on-chain voting, and Mary forks, which paved the way for the use of NFTs . Next is Alonzo.

Alonzo hard fork

The name is taken from the American mathematician Alonzo Church, one of the pioneers of computer science. He was also praised for discovering the lambda calculus (sometimes called the smallest general-purpose programming language).

Alonzo is a hard fork that, once completed, will introduce new features to the Cardano network, such as the development of new DApps and DeFi features. The launch of Alonzo will be carried out in multiple stages, each stage being identified by a color. The current stage, which is blue, will be replaced by Alonzo White and Alonzo Purple.

Can Alonzo realize Cardano's dream of becoming an "Ethereum killer"?

Then there will be a series of sub-phases, if all goes well, it will be deployed on the Cardano mainnet in September this year. The addition of Alonzo’s upgrade will enable Cardano to compete with other decentralized financial ecosystems, such as Ethereum, Binance, Polkadot, Solana, etc.

Charles Hoskinson, the founder of IOHK, said in a recent video that he believes this will be the busiest period in his company’s history. “This may be the busiest 90 days in the history of our company and the history of the ecosystem. I am not saying that Alonzo will appear on the mainnet 90 days after you see this video. What I want to say is, the most critical The engineering path, integration path, coordination path and community path of the company will be carried out in the next 90 days.”

Many projects have been eyeing the new features on Cardano as a way to build a real alternative to Web2 projects. SoMee Plan allows its users to control their data while maintaining their privacy. Users will be able to monetize their content and their data without worrying about it being used or accessed by others.

Due to scale limitations, SoMee’s full vision is impossible to achieve on other blockchains, but the project said that Cardano’s technology has the possibility of realizing this vision, and it can even create a Dapp that replaces Facebook and other social networks.

What this means for Ethereum

Ethereum is undoubtedly the leading player in this field, but Ethereum has always been hindered by high gas fees and slow transaction speeds. Ethereum is also currently undergoing major upgrades, but this obviously also gives Cardano, and other competitors such as Binance Smartchain, Solana and Polkadot, a chance to overtake a corner.

Cardano’s team has been working hard to build an ERC-20 converter that allows Ethereum tokens to be stored on the Cardano blockchain. At the same time, users are still allowed to move back to the Ethereum network freely at any time.

When the architecture was announced earlier this month, IOHK’s Chief Technology Officer Romain Pellerin said. “We believe that blockchain technology can only gain mainstream acceptance when end users are no longer locked in a certain blockchain or a certain standard. Bridges like this are absolutely necessary to ensure that all blockchains Users can have a seamless experience.”

And this kind of interactivity will obviously eat up more of the market share of Ethereum and other networks. Cardano remains the most capitalized cryptocurrency in terms of shareholding value to date. Industry data shows that the total value of Ethereum’s mortgage assets is 12.2 billion U.S. dollars, which is far ahead. Solana, Polkadot and Algorand ranked in the top five.

Cardano’s pledge function allows users to earn passive income in the form of ADA without having to lock up their assets for a certain period of time. In contrast, other agreements stipulate a minimum lock-up period for pledge rewards. If users can transfer their Ethereum to ADA and have more freedom to pledge, this may tilt the balance to Cardano again.

Cardano’s development strategy may be considered unruly and fragmented by some people, but this “criticized” development model does not seem to have a negative impact on the platform’s native cryptocurrency ADA. The total market value of the token is currently ranked fifth and is one of the tokens with the fastest increase in market value this year. Where Alonzo will take Cardano is still worth looking forward to.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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