What Cardano’s Vasil hard fork means for the blockchain

After several delays and some setbacks, Cardano’s long-awaited Vasil upgrade finally went live on September 22nd. From the outside looking in, the hard fork is designed to help improve the ecosystem’s scalability and overall transaction throughput capacity, as well as advance Cardano’s decentralized applications (DApps) development capabilities.

To remember event, an announcement was made by blockchain firm Input Output Hong Kong (IOHK) – which is currently overseeing the design, construction and maintenance of the Cardano platform – just minutes after its development.

To get a more holistic view of what the upgrade represents and its potential impact on Cardano (as well as the crypto ecosystem at large), Cointelegraph reached out to Shahaf Bar-Geffen, CEO of COTI, a protocol for creating decentralized payment networks and stablecoins. . In his view:

“The Vasil upgrade heralds the beginning of a new era for the Cardano ecosystem and the decentralized finance space at large. The upgrade aims to improve network scalability and enhance Cardano’s smart contract capabilities.”

Bar-Geffen further noted that the hard fork will significantly improve the efficiency of Djed, an algorithmically stable coin jointly developed by IOHK and COTI Group, and increase the number of transactions carried out on the Djed platform and thus help position Cardano as a prime competitor for stablecoin transactions.

A closer look at what Vasil has to offer

Before looking at the functional and operational benefits that the Vasil hard fork provides, it would be best to understand exactly what a hard fork is. In its most basic sense, a hard fork is a network upgrade that is initiated when those who govern a blockchain platform decide to add or fix certain features to the ecosystem.

In other words, when a hard fork takes place, the network splits into two versions that run separately, with one version following existing features and rules while the other continues as an upgraded version of the network.

Charmyn Ho, head of crypto insights for cryptocurrency exchange Bybit, explained her view on the technical aspects of the upgrade, to Cointelegraph that on the application layer, Cardano’s Vasil hard fork aims to strengthen the network’s current smart contracts to create a better experience for both users and developers, and adds:

– This will also lead to a more efficient construction process with regard to applications in the chain. At the infrastructure level, the many upgrades that come with the Vasil hard fork will allow Cardano to increase its block size and TPS while maintaining the POS mechanism.

Ho further highlighted that the Vasil hard fork is not only aimed at improving the scalability of the chain and optimizing its existing features, but also at strengthening the network’s stability and connectivity. “This is a major and prominent step forward for Cardano as the upgrade is expected to reduce the network’s transaction costs while increasing transaction speeds,” she added.

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Finally, it is worth noting that Vasil is not Cardano’s first major network upgrade because a year or so ago, the project witnessed the launch of another hard fork called Alonzo, which was designed to allow users to develop DApps using smart contracts. The Alonzo upgrade, along with many other developments, was Cardano’s way of providing users with an attractive alternative to Ethereum, another platform that enables seamless development of new applications using smart contracts.

Why is Vasil so important?

Named after a prominent member of the Cardano community who passed away in 2021, Vasil St. Dabov, the upgrade will improve the ecosystem’s transaction throughput, efficiency and block latency rates. Furthermore, the hard fork will see the implementation of a technique called diffusion pipelining, which seeks to improve block propagation times while increasing the network’s transaction processing capabilities.

The Vasil hard fork will introduce three important Cardano Improvement Proposals (CIPs), namely CIP-31, CIP-32 and CIP-33. In this regard, CIP-31 will spur the introduction of a new reference input mechanism that will allow DApps to access transaction data without having to recreate it as before, making the whole process extremely streamlined and time-saving. At the same time, CIP-32 is designed to enhance Cardano’s original levels of decentralization by introducing an on-chain data storage feature for network participants.

CIP-33 will make transactions easier by making changes to the system’s original programming script, enabling faster processing as well as reduced fees. Finally, another improvement called CIP-40 will be introduced as part of Vasil. It will introduce a new exit transaction mechanism to help improve block transfer without full validation.

Other updates include an improvement to Cardano’s native smart contract programming language Plutus, which will now be more functionally advanced than the previous iteration. Not only that, Vasil will also improve the platform’s security by making it easier to interface with Cardano’s UTXO model (which is built to resemble Bitcoin) while keeping the transaction load off-chain.

Potential effects on ADA

While the first round of the hard fork started on September 22nd, the remaining upgrades are set to take effect on September 27th. So far, the second phase of the hard fork will look to redefine Plutus’ cost model, which has a direct effect on the processing power and memory fees required to manage Cardano’s native smart contracts.

In addition to the Vasil upgrade, the Cardano team revealed that it has been working tirelessly on the development of its layer-2 scaling solution – the Hydra header protocol – capable of processing transactions from the Cardano blockchain while still using it as its core security – and settlement layers.

To this point, a recent update from the Cardano team revealed that it had fixed a known issue with Hydra’s node framework. As things stand, the protocol does not have a fixed publication date. However, the IOHK team has hinted that the offering could enter the market sometime in late 2022 or the first quarter of 2023.

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Vasil was originally scheduled to go live earlier this year, but faced many setbacks. Although the upgrade is live now, the ecosystem continues to reel in from the impact of these delays. For example, since the start of 2020, Cardano’s native cryptocurrency, ADA, has continued to witness a drop in transaction volume. Not only that, but from a pure price-performance standpoint, the upgrade hasn’t been able to do much to boost ADA’s value, with the currency trading down less than 1% on the week.

Despite the fact that ADA’s price action continues to remain rather lackluster, the fact that the Cardano ecosystem has made such huge strides over the past year shows that the project seems poised for big things in the near to medium term.