EP058 – Cardano Vasil Hard Fork
Episode by Peter Bui on August 24th, 2022
The Cardano blockchain is about to undergo a major upgrade called the Cardano Vasil hard fork. This hard fork will primarily revolve around three main Cardano Improvement Proposals (CIPs), which will improve the throughput of the blockchain and allow for more transactions per second. This upgrade is eagerly anticipated by many developers building decentralised apps (DApps) on Cardano, who have been waiting for an improved platform to deploy their protocols and platforms.
Earlier this year, we saw minor tweaks to the protocol that also aimed to improve user experience and transactions per second on the blockchain. In this article, we’ll be looking into certain aspects of the hard fork, what they are, how they will impact developers and end users and when we expect to see the hard fork announcement.
Table of Contents
What is a Hard Fork?
A hard fork is an upgrade from the previous version of the Cardano blockchain and essentially creates a new chain. This new chain will be incompatible with the old chain, meaning that all users and developers will have to upgrade to the new chain to continue using Cardano. Hard forks usually happen when a major change or improvement to the Cardano protocol needs to be implemented. The Cardano Vasil hard fork will be Cardano’s third hard fork since its launch in September 2017.
It is also important to note that Cardano has a unique feature called a Hard Fork Combinator, which makes upgrading the blockchain relatively easy and gives it some backwards compatibility compared to hard forks on other blockchains such as Ethereum.
What Are the Cardano Improvement Proposals (CIPs)?
The Cardano Improvement Proposals, or CIPs, are standards to which all upgrades and changes to the Cardano blockchain must adhere. Many CIPs have been accepted by the Cardano community, with more to be added in the future. The three main CIPs that the Cardano Vasil hard fork will revolve around are:
These CIPs will improve the throughput of the blockchain, allowing for more transactions per second and more complex transactions opening up the decentralised finance space on the Cardano blockchain.
CIP 30: Reference inputs
Reference inputs will reduce the size of transactions on Cardano by allowing inputs to be referenced instead of duplicated. Many applications may want information or values that reside on an input that only one transaction can use simultaneously. Referencing that input allows many more transactions to happen against that information simultaneously.
CIP 31: Inline Datums
Inline datums will enable more data to be stored on Cardano’s blockchain, opening up possibilities for new decentralised applications. Accessing that data and information on-chain easily is an architectural improvement allowing projects to reduce infrastructure costs and off-chain solutions.
CIP 32: Reference scripts
Reference scripts follow on from reference inputs allowing developers to reference a smart contract script already stored on the blockchain rather than including the script with the transaction, greatly reducing the size and cost of the smart contract transaction.
All of these CIPs are necessary for the Cardano blockchain to scale and handle more complex applications such as a dynamic and algorithmic stable coin or over collateralised Forex exchanges such as DJed and Ardana, respectively, or collateral-backed loans and DeFi such as AADA Finance or Liqwid Finance.
It will also allow for more complex decentralised exchanges such as Genius Yield, VyFinance and Maladex that have many more complex features such as automation, machine learning, artificial intelligence and more traditional trading features found in a centralised exchange such as stop losses and limit orders to name a few.
How Will the Hard Fork Impact Developers and End Users?
The hard fork will primarily impact developers building decentralised apps on Cardano. The improved throughput of the blockchain will allow for more complex transactions, which was not possible before the hard fork due to the size limitations of scripts that could be added to a block.
With the various CIPs added to the hard fork upgrade, it will bypass many of these limitations, allowing for more complex scripts to be executed. This will ultimately lead to a better user experience for those using decentralised apps built on Cardano.
For end users, there will be no immediate changes to their user experience when using Cardano until applications complete their upgrades. At the time of writing this article, information from Input Output Global, one of the major companies contributing to the development of the Cardano blockchain, has confirmed that 25 major crypto exchanges account for over 80% of the traded supply of ADA have upgraded. The top 10 decentralised applications have also been upgraded to be compatible with the Cardano Vasil hard fork.
These statistics from Input Output Global are promising news as they will mean a faster user experience for many on the blockchain.
How Does a Hard Fork Differ on Cardano Compared to Other Blockchains Like Ethereum?
As Cardano uses a unique system called a Hard Fork Combinator, hard forks are relatively easy to do and have some backwards compatibility. This is in contrast to other blockchains like Ethereum, where hard forks can be more complicated and often result in two separate chains (Ethereum and Ethereum Classic). The Cardano Hard Fork Combinator essentially allows Cardano to have multiple versions of the protocol running simultaneously, which makes upgrading much easier.
When Will We See the Cardano Vasil Hard Fork Announcement?
The Cardano Vasil hard fork is expected to be announced soon, with a specific date yet to be confirmed. The hard fork will likely happen in early September 2022.
What Does This Mean for Cardano and the Crypto Space?
The Cardano Vasil hard fork is a positive development for both Cardano and the cryptocurrency space as a whole. The improved throughput of the blockchain will make Cardano more competitive with other smart contract platforms like Ethereum.
What Other Upgrades and Improvements Have We Seen On The Cardano Blockchain?
Cardano has seen several upgrades and improvements over the past year. Earlier this year, we saw an increase in block size, improving transactions per second and the user experience. The Cardano community has also been actively working on improving the development tooling of the Cardano blockchain, improving the smart contract programming language, introducing more optimised languages such as Plutarch and developing tools and infrastructure to make development easier and faster on the Cardano blockchain.
The Cardano Vasil hard fork is just the latest in a series of upgrades and improvements on the Cardano blockchain. With the improved throughput of the blockchain, Cardano is well positioned to compete with other smart contract platforms in the coming years.
When Should We Expect to See the Hard Fork on Cardano?
The last thing we need to see before the final call to upgrade to the Cardano Vasil hard fork is a large coverage of stake pool operators upgrading to the latest version of the Cardano Node v1.35.3. This version has been tested on various environments and has no critical bugs making it ready for Mainnet.
When over 75% of the stake pool operators on the Cardano blockchain have upgraded to the latest version, then we as a community can trigger the hard fork and call in the next era of scalability of the Cardano blockchain.
At the time of writing this article, the current percentage of upgraded nodes according to explorer is 28.6% according to CExplorer, which is tracking stake pools signalling their node versions.
Will the Cardano Hard Fork Impact Price?
In conclusion, the Cardano Vasil hard fork is a much-anticipated upgrade that will bring major improvements to the Cardano blockchain. The main aim of the hard fork is to improve the throughput of the blockchain, allowing for more transactions per second. This will be a major benefit for developers building decentralised apps on Cardano, as they can finally deploy their protocols and platforms on a Cardano blockchain that can handle more complex transactions. The hard fork is also expected to positively impact the price of Cardano, as investors will likely see it as a sign of Cardano’s commitment to becoming a major player in the decentralised app space.
Interview with Ben Hart from MLabs
In this interview with Ben Hart from MLabs, we go through the various improvements of the Cardano Vasil hard fork as well as all of the additional projects that he and the team at MLabs are working on from the improvements of Plutarch to the development of the various tools needed to speed up development on the blockchain.
If you’re voting in Fund 9 of Project Catalyst, we suggest you look at and consider voting for these various proposals.
References to Project Catalyst Proposals from the Interview
- Plutarch v2 proposal
- Blockfrost for CTL proposal
- Developer Documentation drive proposal
- the CDA’s consumer education proposal
- The Plutarch repository
- Invite to Plutonomicon discord (support for plutarch, CTL, etc).
Your Thoughts on the Cardano Vasil Hard Fork
What are your thoughts on Cardano’s upcoming Cardano Vasil hard fork? Let us know in the comments below!