Ethereum is the leading blockchain for building smart contracts. It’s actively used in DeFi and NFT, two areas whose popularity has caused a network overload, high network fees and difficulties with updates. Cardano does things differently: it tests all its technology on a test network first. On 13 August, the developers announced the Alonzo hard fork scheduled for 12 September, which will start the smart contract era for Cardano. After the news broke, the coin jumped by 23%, and its capitalisation reached $69.6 billion.
Cardano now works on a faster and more economical algorithm, while Ethereum continues to shift the deadlines for its proof-of-work transition. On the other hand, Cardano uses its own programming languages, and the network is separated into two tiers: one for transactions, the other for smart contracts and DApps. These features should provide better security and user experience while maintaining high transaction speeds.
Smarts contracts are used in the fastest growing cryptocurrency sectors: the decentralised finance (DeFi) market and non-fungible tokens (NFTs). NFTs are digital certificates that can be used to register a copyright for an artwork. They are already used to sell pictures, athlete cards and different 3D models. The market is expected to grow from $1 billion to $15 billion this year.
In DeFi, smart contracts are expected to automate financial interactions between the loan provider and the loan taker without a third party. This area has grown 14-fold in the past year and is currently valued at $84 billion.
Institutional investors have viewed Cardano’s embrace of smart contracts positively, and open interest has started to increase again.
The traders are also becoming more active. After a two-month break, the number of ADA buying orders with leverage has started to grow, something shown by the growing funding rate for perpetual futures contracts.
The Cardano network is far from being fully deployed, but enthusiasts view each of its updates positively. In the past 12 months, the coin’s price has risen by 1,500%. Alonzo’s successful launch would solidify this trend.
The StormGain Analytical Group
