As previously described, a hard fork is an upgrade action taken by a network to move the network in a progressive direction. While many projects occasionally undertake this activity and others do away with it altogether, Cardano (ADA) has made it a duty to implement a hard fork every year.
This year, the upcoming hard fork for the project is the Vasil upgrade, which is scheduled to go live on September 22 — one week after the Ethereum Merge upgrade.
Let’s take a glance at the hard fork and what it means for the network.
Cardano Hard Fork Explained
The Cardano hard fork is expected to improve network connectivity and stability, which could in turn boost network security and scalability. The first Cardano hard fork, Alonzo, went live on September 2021 and introduced much-needed smart contract capabilities for the network. This ended up boosting the adoption of the Cardano blockchain, making it a strong contender in the DeFi space.
As mentioned earlier, the hard fork will go live on September 22 and has been confirmed by Cardano co-founder Charles Hoskinson and other network developers. This comes after previous postponements of the upgrade.
In summary, Vasil will feature several CIP mechanisms, Extended Unspent Transaction Outputs (UTXO) support, and Hydra integration. The CIP mechanism suite will focus on improving the Plutus smart contract language utility and functions. The CIPs include:
CIP-31: Reference Inputs
CIP 32: Inline Datums
CIP 40: Explicit Collateral Outputs
Next, the Extended Unspent Transaction Outputs (UTXO) support Cardano model will provide a secure and flexible system for handling various processes while eliminating system malfunctions. UTXO will make transaction verification notably easier and will allow for better privacy, scalability, and more simplified transaction.
Finally, Hydra integration will likely scale the Cardano blockchain as a Layer 2 system by reducing network latency and improving throughput, or transactions per second (TPS), as popularly known. This upgrade feature will also maintain low transaction fees as the network expands its base and additional dApps and smart contracts make their way to the blockchain.
Final Word
Despite several delays and postponements, the Vasil hard fork is set to become reality on the Cardano mainnet in a few days from now.
That said, market participants remain focused on how this hard fork could influence the price of the native token, ADA, after launch. Network upgrades of this grade usually pack a punch for the underlying cryptocurrency, and this is what many investors are banking on. However, the last few months have shown that there is a more significant factor at play that has thwarted this price reaction. For example, following the Ethereum Merge upgrade — one of the most significant events in the history of the cryptocurrency industry — the price of Ether recorded a massive dump. Some skeptics believe the same could unfold for ADA. Regardless, these are speculations at best, and the outcome remains uncertain.
Moving away from price projections, Cardano developers believe that the hard fork will deal with the first major upgrade to the Plutus script, Cardano’s native programming language. Plutus will feature Traditional CIP mechanisms, Extended Unspent Transaction Outputs (UTXO) support, and Hydra integration.
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