What will be uploaded to Cardano after the launch of Alonzo?

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Key takeaways Cardano is set to launch its Alonzo hardfork on September 12, but questions arise as to what the ecosystem will look like once smart contracts are launched. According to various sources, functional Plutus dApps such as decentralized exchanges will not be ready to go live immediately after the launch of Alonzo. Several projects on Cardano indicate that they are still developing scaling solutions to address blockchain concurrency issues. Share this article

Cardano’s Alonzo hardfork, which brings smart contract functionality to the grid, will go live on September 12. However, it could be several months before DeFi hits the mainnet due to a lack of tools and competition concerns. Several Cardano projects say they are developing scaling solutions that will allow them to operate on the network.

Cardano not ready for DeFi despite upgrade from Alonzo

Cardano is set to launch smart contracts as part of its long-awaited Alonzo update this weekend, but it could be months before DeFi protocols are running on the network.

On Tuesday, Input Output successfully submitted a proposal to trigger the hardfork combiner for the final version of Cardano’s Alonzo update.

The proposal confirmed that the main developers of Cardano are ready to create the Alonzo Purple test network and upgrade it on September 12. The event is highly anticipated by Cardano fans, primarily because it will bring smart contracts written in the Plutus programming language to Cardano’s mainnet for the first time.

The upgrade sets the stage for decentralized applications, known as dApps, to come online on the network. Charles Hoskinson has previously said that Cardano will become a hub for DeFi and NFT, but it turns out it will be some time after Alonzo’s launch before DeFi protocols are brought online to the network.

According to Hoskinson and other Cardano-related sources, functional Plutus dApps such as decentralized exchanges will be added at a later stage. Decentralized exchanges, also known as DEX, are an essential part of DeFi. One of the main reasons for the delay is the design of Cardano’s EUTXO-based protocol, which has scaling issues for dApps.

The decentralized exchange Minswap launched on testnet last week and immediately encountered problems. Users were unable to trade due to a transaction bottleneck, and the project had to shut down its test network. It is believed that other dApps might experience similar issues.

Three notable dApps leveraging Cardano, Sundaeswap, Maladex and OccamFi said they conceptualized solutions capable of overcoming the challenges created by Cardano’s EUTXO model. Several scaling solutions have been proposed, ranging from aggregation of multiple transactions to Layer 2 protocols and side chains. However, there will be a delay between the commissioning of Alonzo’s main network and the launch of these solutions.

SundaeSwap is scheduled to launch in mid-October, and others have hinted at a similar timeline, but these are tentative.

In an interview with bigpey, Cardano stake pool operator Pi Lanningham, lead developer at SundaeSwap, revealed that he believes the chances of having working dApps immediately after the fork are very low. He said:

“I don’t think you’ll see any substantial dApps on Alonzo’s first day.”

Even the founder of Cardano said in a video feed Wednesday that there were many “open questions” about the network’s appearance after the hardfork. “Models, abstractions, and dApps need to be built like any other ecosystem,” he told viewers.

Besides competition concerns, Cardano does not yet offer a diverse set of portfolios or tools for integrating dApps. They should appear with updates to the Plutus app backend, after Alonzo.

In the same video feed, Hoskinson said the only dApps to go live on day one would be “a few smart toy contracts” developed by Input Output.

Other than a few simple dApps, Cardano users will still be able to trade NFTs, currently one of the most popular niches in crypto. NFTs already exist on Cardano because they don’t require smart contracts, although the ecosystem is significantly smaller than those of competing networks like Solana and Ethereum.

Nonetheless, the Cardano community is optimistic for the coming months. Positive sentiment prevailed after Cardano invested in more than 160 projects through its Catalyst innovation fund.

With Cardano currently at a market capitalization of nearly $ 80 billion, project cash also holds over $ 1 billion to fund development. It looks like Cardano has the resources to build a rich ecosystem of DeFi apps – it just takes longer to come to fruition.

Disclosure: At the time of writing, the author of this feature held less than $ 100 in ETH.

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