CDA Update: CIP Education and New Membership

The CDA has been hard at work on our organizational structure and nurturing IOHK support to help bolster our future operations. We have also continued our conversational focus on education and deciding the more effective topics to bring forward that benefit both the developer and consumer communities. Education remains our highest priority for building the ecosystem and is a cornerstone of our formation

We have also accepted 3 new members since our last update; MuesliSwap, MetaDex, and COTI. We are happy to incorporate their teams and you can read more about each one at the end of this article.

Membership applications and integrations are currently on hold until we have finalized our structure and begun to provide more for the community. This halt will allow us to create a stronger foundation to more easily integrate new members and harness their strengths and expertise more effectively to bring the Cardano community greater tools to build with.

The first topic:
CIP 31, 32, 33 and Why They Matter

If you’ve been lurking in the community discord for any of the CDA protocols, you’ll probably notice a theme. Many of us outright require, or greatly benefit from CIP’s 31, 32, and 33.

But what even is a CIP? And what do these 3 CIP’s actually change about the chain’s behaviors?

CIP stands for Cardano Improvement Proposals. These represent the currently recommended solutions to common problems on-chain. These allow the Cardano development community to weigh in on changes to Cardano itself, as well as align on common solutions for interoperability. They are governed by the CIP Editors, who meet biweekly here:

CIP’s 31–33 were introduced in late December and merged into the CIP repo over the following 2 months, as IOG committed to prioritizing these changes for the June Hard fork.

In order to have a high-level understanding of these changes, we need to understand something fundamental about the EUTXO model, which Cardano uses to enable smart contracts. In UTXO systems, rather than having an account, your total funds are divided into parcels of tokens which:

  • must reside at an address (your wallet, a smart contract)
  • must have some contents: some minimum amount of Ada, optionally other assets.
  • can have some data attached

These parcels of tokens are called ‘transaction outputs’, in a transaction, one or more ‘transaction outputs’ are spent, and new outputs are created, holding the tokens at their new locations. In the case of smart contracts, the ‘data attached’ is used to determine if it is OK to spend these outputs in different situations by the smart contract. Each output is spent exactly once.

If you need to show a special token or get some special information on-chain to satisfy a smart contract, it means you need to spend the output that holds that token or holds the special information as data. If you spend that data in the current block, that means nobody else can! So for example, if we need to know the current price for a trade on a dex, we need to consume an output that can tell us that kind of information. This issue is framed really well in the SundaeSwap Medium Article Concurrency, State & Cardano.

This brings us to CIP-31 — Reference inputs, This fundamentally changes how transaction outputs can be used — in short, if you do not change the content of an output, but only examine it, then the output does not need to be spent, and can be used by others in the same block. This is a game-changer as it will allow greater information sharing and address many of the concurrency concerns that make it difficult to design and build complex protocols on Cardano.

CIP-32 — Inline Data is a convenience — but a valuable one. This allows developers to write data directly on the transaction outputs themselves, where currently the outputs need to reference the data on the transaction that consumed them. This change will make it easier for developers to find and use the data associated with transaction outputs, as well as enabling CIP 33. Currently getting this information can be quite difficult and often involves keeping an indexed cache of many transactions available. This change should decrease the infrastructure required to run a dApp, and make it easier to decentralize smart contract applications.

Finally, CIP-33 — Reference Scripts is critical as it provides on-chain script storage, similar to what is available on Ethereum today. Currently, our on-chain scripts must be attached to the transaction itself, which makes transaction sizes very large and makes it difficult to fit transactions within the on-chain limits for script size. This CIP will allow us instead to set an on-chain smart contract script as the Data on a transaction output, which can then be referenced by many transactions. Script size is currently a huge obstacle for many developers, and this may allow us to be more flexible in designing solutions that leverage larger scripts, in order to spare memory and execution units.

Cardano’s Block & transaction size limits are not very different from Ethereum’s, and one of the key differences is how script sizes are included in the transaction size on Cardano, Moving the script size out of the transaction is a tremendous benefit to developers as it greatly increases expressive capabilities on-chain.

So to summarize the changes that we expect from this aspect of the June HardFork:

  • Ability to more easily share critical information between transactions in parallel
  • A simplified model for storing data & information needed on-chain
  • Move script size out of the Transaction, making it much less of a concerns

New Members:


MuesliSwap is an orderbook decentralized exchange on Cardano mainnet and Milkomeda. MuesliSwap’s goal is to bring together the best of traditional finance and decentralized finance (DeFi) . The orderbook approach to token trading by MuesliSwap is tailored to the Cardano EUTXO model, distinguishing it from the popular DeFi approach using AMMs. Overall, MuesliSwap aims to enrich the Cardano Defi ecosystem with a range of new trading features like limit orders.

‘’We are very excited to join the Cardano DeFi Alliance because we believe the biggest strength of Cardano isn’t the technology, which is absolutely brilliant, but the community itself. So joining the CDA makes it somehow official for us and it’s a great feeling to be a part of it.’’


MetaDEX strives to provide true innovation to DeFi — both on the mathematical, social and meta-level. Regarding the tech, it is built on various yet unseen — irrespective of chain — research efforts. On the topic of community, the project aims to live decentralization on all levels; most importantly, financially unwise tokenomics and the striving for transformation of a regular dev team into a culture of free experts co-owning what they built. Finally: MetaDEX, being the most meta DEX, will seed the fastest moving cluster of innovation with unapologetic perfectionism; the same philosophy that makes Cardano as a whole so great. We don’t have time to fix more fundamentally broken coordination points, let’s do it right from now on.”

Quote regarding the CDA:

“While chaos breeds intriguing diversity, MetaDEX is excited to collaborate with the other prime movers of the ecosystem on solving the most pressing barriers we face. Let us demonstrate how the most decentralized and ambitious chain can live the original vision of our industry.”


COTI is a layer 1 fintech on the blockchain ecosystem, specifically designed for payments.

COTI meets the challenges of both centralized finance (fees, latency, global inclusion, and risk) and Decentralized Finance DeFi (fees, clogging, and complexity) by introducing a new type of DAG-based base protocol and infrastructure that is scalable, fast, private, inclusive, low cost and is optimized for finance.

Djed, Cardano’s algorithmic stablecoin is powered by COTI. As part of COTI’s role, COTI is in charge of developing the user interface system and will operate the integration between users to the smart contracts for the stablecoin. COTI will partner with enterprises, developers, and other parties in order to mint both the stablecoin and the reserve coin used as part of the pegging algorithm.

“We are delighted to join CDA, the Cardano DeFi Alliance. By powering Djed, the main native algorithmic stablecoin of the Cardano DeFi network, we feel it is only natural to take part in this important alliance to contribute to the standardization of best practices within the Cardano DeFi ecosystem”. ~ Shahaf Bar-Geffen, CEO




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