Cardano Now Has Smart Contracts. Will They Work?

September 13, 2021       /       Unchained Daily       /       Laura Shin

Daily Bits ✍️✍️✍️

• The IRS and Treasury departments consider cryptocurrency brokerage requirements to be a priority for this upcoming tax season.

• Ark Invest is open to the possibility of investing in Canadian-based crypto ETFs.

• Terra’s first NFT project, SpaceLoot, went live this weekend.

• NFT collectible sales saw a significant decline in sales last week.

• The Lobby Lobster NFT DAO votedunanimously to donate $4M in crypto to Coin Center.

• A ruling from the Epic vs. Apple case could enable easier use of crypto as payment on Apple devices.

• Pantera Capital’s latest blockchain fund has raised $369M.

• NCAA basketball player Jaylen Clark launched his own cryptocurrency.

• Two Virginia public pension funds are seeking approval to invest in funds with crypto exposure.

• A Solana-based NFT sold for $1M+.

• A16z is looking for token delegate applicants.

• Bitcoin’s hashrate is up 50% since June lows.

• China state media described the NFT market as a “huge bubble.”

• Cere Network, the developer behind a blockchain-based customer relations system, raised$31M in its latest funding round.

• Bitwise’s “Bitwise 10 ex Bitcoin Crypto Index Fund” is set to give investors exposure to crypto outside of Bitcoin.

• Harmony, a layer 1 blockchain, announced a $300M fund to kickstart growth on its network.

• Alogrand Foundation launched a $300M DeFi innovation fund that will support the development of DeFi applications on Algorand.

What Do You Meme?

What’s Poppin’?

At 5:47 PM (ET) yesterday afternoon, Cardano’s latest network update, Alonzo, went live, finally delivering on the promise of bringing smart contracts to the third-largest blockchain by market capitalization.

Cardano is an open source blockchain that was launched in 2017 with hopes of competing with Ethereum to become the hub of decentralized finance. However, until yesterday, Cardano did not offer developers smart contract capability.

Tim Harrison, marketing and communications director at Input Output, the team behind Cardano, described Alonzo as the “epochal moment in the birth of a new ecosystem.” He added, “The Alonzo upgrade will bring highly anticipated capabilities to Cardano through the integration of Plutus scripts onto the blockchain. These will allow the implementation of smart contracts on Cardano, enabling a host of new use cases for decentralized applications (dapps) for the very first time.”

With Alonzo, DeFi and dapps may be on the way to Cardano, but it does not appear that the ecosystem is quite ready for prime time. Said Harrison, “There are high expectations resting on this upgrade. Some unreasonably so. Cardano watchers may be expecting a sophisticated ecosystem of consumer-ready DApps available immediately after the upgrade. Expectations need to be managed here.”

For example, while smart contracts were still on testnet last week, a Cardano dapp called Minswap shut down shortly after its introduction due to issues with processing multiple transactions at once— a feature integral to DeFi. (According to SundaeSwap Labs, the issue was with Minswap rather than Cardano, but it remains a good example of the kinks that must be worked out.)

Interestingly, it appears that Cardano has an amount of development activity that could build out a DeFi ecosystem and streamline the smart contract process. Data from a recent Outlier Ventures report shows that Cardano developers were the busiest of any blockchain — averaging 701 commits per month to GitHub code repositories. For context, Ethereum came in second place, with 447 per month. Furthermore, Cardano ranked second in active monthly developers, with 165 devs helping build out code each month (compared to Ethereum with 168).

At publishing time, Cardano’s native token (ADA) is sitting at $2.59, up from $0.18 from January 1, 2021. With a market cap of $83B Cardano is the third largest cryptocurrency. However, to realize its dream of competing with Ethereum (founder Charles Hoskinson was an Ethereum co-founder), Cardano would have to almost 5X in size.

Recommended Reads

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• Mario Gabriele, author of The Generalist, on SushiSwap:

On The Pod…

Was Coinbase CEO Brian Armstrong Entitled to a Meeting With the SEC?

• why Coinbase is unhappy with what it calls the SEC’s “sketchy” behavior

• how Coinbase’s Lend product is structured and why it might be a security

• why Ephrat considers Coinbase’s reaction to the SEC’s decision on Lend to be “trolling”

• what we can learn from SEC chair Gary Gensler’s letters with Senator Elizabeth Warren

• what legal precedence the SEC is leaning on in its decision about Lend

• how to explain the SEC’s choice to not meet with Coinbase in Washington

• why Ephrat thinks Brian Armstrong sounds entitled

• Why even pro-Bitcoin groups in the US take issue with El Salvador’s adoption of Bitcoin as legal tender

• why Ephrat thinks Bitcoin is not a practical payment mechanism for El Salvadorans

• how El Salvadorans have reacted to the law

• why Ephrat believes El Salvador’s mandate to accept BTC is philosophically problematic for Bitcoiners

Book Update

You can purchase it here: http://bit.ly/cryptopians