Decentralized applications and smart contracts are here to stay. Investors are pouring billions into decentralized finance protocols like Uniswap, and other blockchain-enabled products like non-fungible tokens (NFTs) are steadily making their way into their mainstream.
Ethereum, a blockchain platform launched back in July 2015, has been at the forefront of practically every blockchain trend that has emerged in recent years. However, there are multiple competitors that could present a real challenge to the current king of smart contracts.
Cardano is one of the most important Ethereum challengers
Cardano is often called an “Ethereum killer”, a label that has also been put on other competing smart contract platforms such as Solana, Polkadot, Binance Smart Chain, Avalanche, and Algorand.
Ironically, interest in such platforms peaked as Ethereum became more popular. Whenever there’s a lot of demand for transacting on Ethereum, fees skyrocket to almost absurd heights. For example, on May 12, 2021, Ethereum users were paying almost $70 on average per transaction – not a great look for a platform that’s meant to make (financial) services accessible to everyone. While Ethereum enthusiasts are looking forward to Ethereum 2.0 as the solution for most of the platform’s current woes, others are shifting their attention to alternative blockchains like Cardano.
ADA is the native asset of the Cardano blockchain – it performs a similar role as BTC on the Bitcoin blockchain and ETH on the Ethereum blockchain. ADA has certainly benefited from the hype surrounding Ethereum alternatives, with its price increasing by a whopping 1,300% since January 1.
According to CoinCodex, the Cardano price is $2.50 at the time of writing. This translates to a market capitalization of $78.6 billion for ADA, making it the third-largest crypto asset by market cap. ADA has a solid lead over the fourth-ranked BNB ($72.1 billion), but the second-ranked ETH ($427.2 billion) currently seems to be out of reach, unless some completely unexpected events unfold in the cryptocurrency market.
Will Cardano’s slow and steady approach to development pay off?
The Cardano project is trying to distinguish itself from competitors by taking a more rigorous approach to develop and shipping new features and even implements a peer review process in an effort to maintain high-quality standards.
Cardano’s blockchain is securing tens of billions of dollars worth of assets, so this careful approach certainly has its benefits. However, it also means that it will take some time before Cardano actually offers the same level of functionality that Ethereum users are currently enjoying.
With the Alonzo hard fork successfully completing on September 12, the Cardano project made an important step towards competing with the likes of Ethereum. The Alonzo upgrade officially added smart support for smart contracts functionality to the Cardano blockchain, laying the foundation for decentralized applications to be built on top of it. The upgrade also marked an important milestone for Goguen, one of the 5 main “eras” of Cardano’s development. Following Goguen, the Cardano project will focus on scalability in the “Basho” era, and finally governance during the “Voltaire” era.
Currently, complex decentralized applications (DApps) like Defi protocols are not yet live on the Cardano blockchain. However, some simpler smart contracts have already been deployed on the blockchain – in fact, more than 100 smart contracts went live in the 24-hour window following the Alonzo launch. The Cardano project will gradually roll out more advanced tools that will enable developers to deploy increasingly complex decentralized applications.
Charles Hoskinson is the CEO of IOHK, the blockchain development company at the forefront of the Cardano project’s technical development. In a recent interview with City A.M., Hoskinson struck an optimistic tone on the future progress of smart contracts on Cardano, and said that we’ll be seeing widely adopted DApps built on the platform within a year:
“This time next year, there will be useful, and in some cases, life-changing, decentralized applications running on the system which will transform the lives of millions to billions of people throughout the next decade.”