What Will Happen After the Cardano Alonzo Hard Fork?

Coming out of the Shelley era, Cardano is ready for its third major development, the Alonzo hard fork. Here's what to expect after it goes live.

Alyssa Exposito - Author

Sep. 10 2021, Published 12:16 p.m. ET

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Source: Canva, Cardano

With developments for the Cardano network in perpetual progress, the network is gearing up for the Alonzo hard fork launch on Sept. 12 after facing bottleneck issues last week. Aiming to utilize functional decentralized applications like DEXs (decentralized exchanges), many Cardano fans are eagerly anticipating what will go live after the hard fork launches.

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The Alonzo hard fork will be the third major update on the Cardano network that's slated to improve the overall functionality of smart contracts on the blockchain. After the hard fork launches successfully, anyone will have the ability to deploy their own smart contracts to the blockchain. Closing out from the Shelley era, Cardano seems to be ready for building, but will the network be ready?

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Source: Canva
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It could be several months before DeFi comes to Cardano due to a lack of tooling and concurrency issues.

While the update is only a few days away, Cardano enthusiasts should expect it to take a few months before any of the decentralized finance (DeFi) protocols are up and running on the network. Earlier this week, Cardano's partner, Input Output (IOHK) successfully submitted a proposal to trigger the hard fork combinator for the final version of Cardano’s Alonzo update. This signals that Cardano's core developers are ready.

Source: Twiiter: (@InputOutputHK)
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However, despite signaling about being ready to launch, Cardano founder Charles Hoskinson has alluded that the dApps (decentralized applications) won't be added until a later stage. This impacts many key parts to the much anticipated Alonzo launch since dApps, like DEXs, are a core component of DeFi. The biggest reason for delaying these applications is because Cardano’s extended unspent transaction output (eUTXO)-based protocol design has major scaling issues.

Critics are skeptical about whether the protocol design is up to the task. They think that the structure isn't flexible enough to support popular applications that drive high traffic and transactions daily. The testnet had issues immediately when attempting transactions, which forced the project to shut down the testnet.

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Solutions have been "conceptualized" to overcome challenges created by Cardano’s eUTXO model.

Three dApps building on Cardano, Sundaeswap, Maladex, and OccamFi have been coming together to solve the scaling issues. Together, they have proposed a range of solutions from aggregating multiple transactions to Layer 2 protocols and potential sidechains—none of which are happening on the launch day.

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While not clear, the dApps previously mentioned do have a tentative timeline to be released sometime in October with an emphasis on "tentative." The lead developer of Sundaeswap, Pi Lanningham, said that he doesn't think any user will see "...any substantial dApps on day one of Alonzo.”

Cardano seems to have the resources for building, but needs more time.

While there are several concurrency issues amid the Alonzo hard fork, and the fact that the network doesn't offer diverse wallets for support, the Cardano community remains optimistic about the future of its development. Cardano is currently at a total market cap of almost $75 billion and the project’s treasury holds over $1 billion to fund future development.

Keeping the community constantly engaged and maintaining the funds to pursue further growth, it seems Cardano needs a bit more time to see the fruit of its labor.


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