Cardano News: IOHK Moves Closer to Smart Contracts Release
Exciting news for Cardano as it was revealed that the proof-of-stake blockchain platform has gotten one step closer to competing with Ethereum in the DeFi and NFT space! Dubbed the “Ethereum killer,” Cardano has successfully concluded a test that allows them to support smart contracts on their blockchain.
Developed by the co-founder of Ethereum, Charles Hoskinson, Cardano was built as the next evolution of blockchain technology that would solve two main issues plaguing ETH: scalability and transaction fees.
Unlike Ethereum’s congested network and pricey transaction fees, Cardano’s ecosystem is well known for executing transactions quickly and at cheaper fees. Moreover, the Cardano blockchain has caught attention for possibly being greener than its large and energy exhaustive counterpart, a feat that is particularly important now that the focus is on more environmentally-friendly crypto.
Cardano’s developer community, IOHK, made the announcement regarding their successful smart contracts test last week – igniting a wave of excitement and signaling a new beginning for Cardano.
With ADA smart contracts, the Cardano ecosystem will be positioned to capitalize on one of the fastest-growing sectors in cryptocurrency: non-fungible tokens (NFTs). In 2021, NFTs have generated over $2.5 billion and they don’t show any signs of slowing down.
And the excitement generated by the Cardano news rollout is real, with brands like the luxury retailer Dolce & Gabbana and fantasy football game Sorare already partnering up with Cardano to produce NFTs. Its token, ADA, has been gaining investors’ attention as of late given its innovative platform and 500% year-to-date rally.
Furthermore, smart contracts are the cornerstone of decentralized finance (DeFi). Aside from its reception from retail investors, who have over $59 billion to be removed from circulation and placed into smart contracts (referred to as “lock-ups”), DeFi has been a catalyst in the rapid adoption of cryptocurrency by major financial institutions.
From Goldman Sachs to Bank of America, the allure of new revenue-generating products – or concern over potential disruptions to their business models – DeFi has turned former skeptics into brand ambassadors for blockchain technology and cryptocurrency.
Despite the excitement around these latest upgrades, investors need to be mindful that Cardano will need to “catch-up” to Ethereum in the NFT and DeFi space. Ethereum has positioned itself as the default foundation of DeFi over the last 12-18 months.
However, Cardano’s decision to build its blockchain into proof-of-stake from the onset may be a blessing – as Ethereum is set to migrate to this operating model on August 4th. It creates a scenario where Cardano can gain ground on Ethereum if the transition is not flawless for Ethereum’s investors and developers.