Cardano Performance Overview

Call it anticipation for the Vasil hard fork merge on testnet or the impact of the exploding number of interoperability upgrades on Cardano, but despite its bearish movement in the past months, the altcoin seems to be making a notable turnaround.

Between June and July, the level of activities on Cardano have been increasing exponentially, with growing attention from sharks and whales.

As a consequence of the overall crypto market decline, Cardano investors have been actively dumping their assets since February. However, based on a report by Santiment, presently, there are major activities in Cardano shark addresses, and in a similar vein, dumping in major whale addresses has come to a halt. Cumulatively, addresses holding between 10,000 and 100,000 ADA have added 79.1 million $ADA in the last 30 days.

A Look at Cardano EVM Sidechain

As previously highlighted, one of the anticipated perks of the Vasil upgrade is the ability to boost transactions on the Cardano main chain and its EVM sidechain. For this to actualize, it is fundamental that the Cardano sidechain and Cardano mainnet’s interoperability with other blockchain networks are enabled.

Cardano is different and this derails its interoperability…

Markedly, Cardano differs from other blockchain networks in terms of transaction models (UTXO model), signature schemes, and elliptic curves (EdDSA and Curve25519), as well as the smart contract environments and programming languages.

What’s good about the EVM Sidechain?

To foster Cardano’s interoperability with other networks, the EVM sidechain (Alpha) was launched in June. The implication of the launch is that in addition to optimizing on-chain governance and the ultimate voting experience by creating decentralized governance applications and building solidity-based applications on Cardano, it will also be possible for developers to create smart contracts and decentralized applications using Plutus in an environment that is highly resourceful.

Developers will also be able to deploy EVM-compatible smart contracts on Cardano using the EVM sidechain while avoiding the associated high gas fees.

In a statement via Twitter by Input-Output Hong Kong (IOHK), the parent company for the Cardano blockchain, the Alpha sidechain, which will be the first sidechain developed by IOG will allow solidity developers to build DApps on an energy-efficient (based on its energy consumption) compared to other proof-of-work blockchains and permissionless platform.

Main Features and Security

The EVM sidechain will maintain full compatibility with Ethereum tools and applications in addition to retaining developer tool compatibility, which will ultimately alienate any barriers to entry for solidity developers on the Cardano network. The sidechain will also retain compatibility with Web3.js wallets to enforce the anonymity of users and data protection.

In the spirit of transparency and for purposes of decentralization, the sidechain will follow a permissionless approach.

Ethereum’s proof-of-work consensus algorithm will be replaced by the EVM sidechain’s Ouroboros Byzantine Fault Tolerance (OBFT) consensus protocol.

Security

The EVM sidechain’s security will feature the following:

1. Validator selection

2. Block production

3. State observation

4. Reselection process

Cardano’s Interoperability Upgrades on the Rise

Interoperability is seemingly instrumental to Cardano’s growth plans based on the growing number of interoperability projects in the works. A case in point is the Milkomeda C1, an EVM protocol launched in March, and the Cardano-Wanchain project.

Interoperability is one of Cardano's key features, providing the ability for different blockchain networks to communicate and exchange data with each other. This is crucial for the growth of the blockchain industry, as it enables developers to build more advanced decentralized applications that leverage the strengths of multiple blockchains.

In recent months, Cardano has made significant strides in upgrading its interoperability capabilities, particularly in the areas of cross-chain communication and bridge-building. By enabling cross-chain communication, Cardano is opening up new opportunities for developers to create more sophisticated dApps that can take advantage of different blockchain features. And by building bridges between different blockchains, Cardano is creating a more integrated and interconnected ecosystem of blockchains.

Cardano's focus on interoperability is a game-changer for the blockchain industry, creating new opportunities and paving the way for widespread adoption and mainstream acceptance of this groundbreaking technology.

ADA's future implications with Valentine Upgrade

Cardano is gaining traction among investors as a result of recent headlines. With the release of the Valentine upgrade on the Cardano mainnet, there is increased interest in Cardano price predictions. The upgrade aims to improve interoperability and blockchain security, as well as cross-chain functionality and developer enhancements. This upgrade is especially important for Cardano developers creating decentralized finance applications. Investors in Cardano and ADA tokens on the network are also paying attention to the potential impact of the upgrade. The network effects are expected to grow as more projects adopt interoperable blockchains like Cardano. Analysts are revising their models, resulting in an intriguing disparity among experts. Therefore, understanding the implications of the Valentine upgrade is essential for investors seeking to make informed decisions about investing in ADA.

The EUTXO accounting model:Overview

Cardano is a blockchain technology that utilizes an Extended Unspent Transaction Output (EUTXO) accounting model. The EUTXO model combines the unspent transaction output (UTXO) accounting model from Bitcoin with the ability to handle smart contracts. Compared to other blockchain accounting models, the EUTXO model offers several advantages.

One advantage of the EUTXO model is its representation of global state. In this model, global state is represented by a list of all transaction outputs and their ownership data. Adding new UTXOs extends the state without changing it.

Another advantage of the EUTXO model is its transaction validation process. The validity of a transaction depends only on the transaction itself and its inputs, rather than anything else on the blockchain. This allows for off-chain validation before the transaction is sent to the blockchain. Additionally, the deterministic nature of the EUTXO model makes transaction fees predictable based on transaction size, regardless of network load.

The EUTXO model also offers scalability benefits. Nodes can validate transactions in parallel, as long as those transactions do not attempt to consume the same input. This parallel validation allows for greater throughput.

Smart contract capabilities are another benefit of the EUTXO model. The EUTXO model fully supports Plutus smart contracts, which can lock-up UTXOs, ada, native assets, and NFTs. Smart contract developers have a powerful and versatile platform to construct and deploy apps.

The EUTXO model's design is better suited for DEXs built on order book architecture, as it mitigates the effects of impermanent loss. DApps can split on-chain state across many UTXOs to achieve concurrent and parallel execution, enabling higher throughput.

The EUTXO model's proof-of-stake transaction concurrency leads to lower energy consumption than proof-of-work chains. Finally, the EUTXO Alliance, of which IOG is a part, is dedicated to making the UTXO model more scalable, secure, and interoperable. Overall, the EUTXO model's security, flexibility, scalability, energy efficiency, predictable fees, and smart contract capabilities make it a powerful blockchain accounting model.