Cardano Gets Smart Contracts Capabilities as Alonzo Upgrade Goes Live

Divya  |  Sep 13, 2021

After several months of anticipation, Cardano deployed the Alonzo upgrade on Sunday at 21:44:51 UTC. With Alonzo’s implementation, Cardano now has access to smart contracts capabilities that will help it secure a foothold in the world of decentralized finance (DeFi).

Smart Contracts Arrive on Cardano as Alonzo Upgrade Goes Live

Input-Output HK (IOHK), the company behind Cardano blockchain said late Sunday that it has successfully added the Alonzo upgrade, ushering a “new era” for the network.

The announcement signifies a huge step forward for Cardano, which is vying for a sizable share of the DeFi market with Ethereum blockchain. Until now, the network has missed out on opportunities in the DApps ecosystem due to missing features. But Sunday’s development is about to change that.

Following Alonzo’s deployment, Cardano now supports smart contracts, allowing various teams and developers to build their protocols directly on the PoS blockchain. Before the upgrade, this capability was available to a limited group of testers. 

Notably, Cardano’s new features depend heavily on the Plutus framework which leverages the extended UTXO model.  According to IOHK, the UTXO model outperforms the traditional accounting models by determining the validity of a transaction before its sent to a blockchain and calculating execution costs before transmission.

ADA Faces Several Roadblocks Ahead

Earlier this month, Cardano’s native currency ADA hit an all-time high of $3.09, when IOHK launched Alonzo’s testnet. However, the price plummeted to $2.60 after several reports of “concurrency issues” came to light.

Basically, in its current state, Cardano has difficulties interacting with multiple users at the same time. The network’s first Dapp, MiniSwap, was forced to shut down operations because it failed to process multiple transactions. 

For its part, IOHK asserted that the way Cardano handles transactions assures “greater security” and “fee predictability.”

But the issues have already compelled many decentralized exchanges to delay their launch on the network. Meanwhile, three leading DApps -- Sundaeswap, Maladex, and OccamFi -- said that they’ve found solutions to overcome the challenge. 

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