Five years of Cardano: what's next?
Cardano celebrated its fifth anniversary last week.
Cardano celebrated its fifth anniversary last week. Shortly before that, the Vasil upgrade was completed successfully. What's next?
On September 28, Cardano, the blockchain founded by Ethereum co-creator Charles Hoskinson, celebrated its fifth anniversary. Since its 2017 launch, the project has achieved a lot, even though IOHK’s development team is known for its scientific (and somewhat slow) approach. Still, after half a decade, three of the five major milestones on the roadmap are complete.
In the current "Basho" era, Cardano is focused on scaling the blockchain. Recently, Charles Hoskinson announced the start of the next era (named Voltaire). It’s the final phase before Cardano’s completion in the fifth stage. Voltaire paves the way for fully decentralized governance of the blockchain. The latest major changes in speed and infrastructure followed the Vasil upgrade on September 22. Step by step, the project is making progress. What’s the next step for Cardano? Here’s an overview.
Cardano: applications and stablecoins
In September 2021, Cardano brought smart contracts to the blockchain with the Alonzo hard fork. There are now more than 3,000. The already large Cardano ecosystem benefits from performance gains and more efficiency with the latest Vasil upgrade, as transaction data size has been compressed. The decentralized exchange Muesli-Swap announced that its on-chain fees View post on X.
Vasil now enables more complex applications on Cardano. The hi-fi sector will likely see a big growth spurt due to this and improved performance. There’s plenty of room for improvement in these areas. Cardano’s Total Value Locked (TVL) is currently just under $75 million. That even puts it behind blockchains like EOS, which people thought were dead in the DeFi rankings. There’s always room to grow.
A key ingredient missing for mass adoption remains: stablecoins. Right now, DeFi tokens on Cardano are valued against the domestic ADA coin. Well-known stables like USDT and USDC are absent, and there aren’t other highly liquid, dollar-pegged options on the network. But that’s set to change soon.
With the DJED stablecoin, the COTI project is bringing a new type of algorithmic stablecoin to the blockchain. Unlike other networks, it can even be used to pay transaction fees. So users benefit from intuitive usability. With the DJED Stable, big lending protocols and decentralized exchanges could integrate a key piece of crypto trading on their platforms, potentially boosting Cardano’s demand and liquidity significantly.
To support this, Emurgo, one of the two entities behind Cardano’s development, announced financial backing in the form of a fund for new and existing applications. Over the next three years, Emurgo aims to back projects built directly on the Cardano blockchain with up to $200 million. Of that, $100 million is earmarked for projects in Africa. The Cardano team has long focused on this region and already provides more support via the View post on X.
Scaling
The Vasil upgrade was only one part of the scaling push happening in the Basho era. The endgame for blockchain performance is the layer-2 solution "Hydra". It’s as important for Cardano as sharding is for Ethereum. In theory, after full implementation, Cardano could handle a million transactions per second. IOHK explains in a blog post how this could work.
There’s no precise timetable for scaling yet. The first integrations on Cardano’s testnet were completed this year. In earlier comments, Charles Hoskinson said Cardano’s roadmap could wrap up by the end of 2023, with a cautious expectation of full-scale deployment later. Cardano will stay true to its approach and tackle technical projects like Hydra before a release. The latest Vasil upgrade could already bring the needed wind to the ecosystem.
Ambitious DeFi projects like Liqwid Finance, Genius Yield and View post on X (formerly Maladex) are waiting in the wings. Existing major players on the network can continue to develop their potential. The slow pace of development that Cardano has sometimes been accused of by the rest of the industry seems to have had a positive effect on the quality of its milestones so far. Despite the cautious approach, the network’s development is on track. For Cardano supporters, this offers hope that a third-generation blockchain can be expected in the coming months and years.
