What is Cardano’s Vasil Hard Fork?
The Ethereum Merge is right around the corner — but so is Cardano’s Vasil hard fork. Cardano is a proof-of-stake (PoS) blockchain build on peer-reviewed research. It aims to provide the top security and sustainability to decentralized applications. Its token, ADA, ranks №8 by market cap on CoinMarketCap.
The Vasil hard fork, named after former Cardano evangelist Vasil Dabov, will bring multiple upgrades to the network including new smart contract language, reduce block production latency, and introduce ‘diffusion pipelining’ to their blockchain. Here’s what’s included in the Vasil Hard Fork:
The Vasil hard fork
This upgrade is part of the third development era on Cardano’s roadmap; after an additional hard fork following Vasil, Cardano will enter the phase of Basho. Basho focuses on interoperability, scalability, and overall network optimization.
The hard fork can be broken down into four Cardano Improvement Proposals (CIPs):
CIP 31: Reference Inputs
Per the name, CIP 31 introduces a new type of input, a reference input, which allows looking at an input without spending it. It is meant to facilitate accessing information on the blockchain without so much churn.
In practice, the issue is that retrieving information stored on a block produces a new output and burns the old output. A different user wishing to retrieve that information must then wait until the new block is finalized before retrieving the same information. This throttles applications to one ‘operation’ per block. Additionally, looking at the information requires spending the output, and necessitates a certain distributions of funds that is stringent, inconvenient, and costly for users. CIP 31 is meant to solve these inconveniences.
CIP 32: Inline Datums
Datums are a piece of information attached to outputs. The current blockchain implements datums by attaching hashes of datums to outputs, and transactions require the actual datum to be attached. This means that, in the current state, the creator and spender must communicate with each other to know the real value of the datum rather than the hash. This CIP proposes putting the datum itself into the output, rather than its hash. In doing so, this system will simplify systems for dApp developers substantially.
CIP 33: Reference Scripts
This CIP proposes attaching reference scripts to outputs, and allowing these scripts to satisfy script requirements for validation. Currently, spending transactions are required rather than scripts to validate. This will allow transactions to be much smaller.
Script size poses an issue. When a script is used, the transaction it was used for must include the whole script. This inflates the transaction size and slows the chain down. Additionally, it poses a transaction size limit issue which can be problematic for users that use multiple scripts. CIP 33 proposes that a transaction that uses a script does not need to include it in the transaction itself, so long as it is referenced in the output.
CIP 40: Explicit Collateral Outputs
This CIP creates a new output type to transactions called Collateral Outputs.
As it stands, current transactions that use Plutus smart contracts must put up collateral to cover the potential cost of execution failure. The inputs must have the following properties:
- Cannot contain any ADA tokens
- Cannot be script addresses
- Must be a UXTO input
- Must be some percent of the fee in the transaction input
- Is consumed entirely if the transaction execution fails in validation
These requirements provide undue restrictions to users for the following reasons:
1. Not containing ADA is difficult because dApp’s rarely have entries that do not contain any tokens; and,
2. Wallets want to protect users from signing transactions with large collateral, as they cannot know the outcome of the transaction (success or failure).
By creating collateral outputs, this CIP seeks to rectify these issues.
Diffusion Pipelining
This is Cardano’s major consensus layer scaling solution. It seeks to improve block propagation times, leading to higher throughput. It streamlines the process of sharing information on the blockchain with network participants. Cardano’s team is targeting a complete share of new blocks created within five seconds after creation. Diffusion pipelining also provides more space for block size increases and script improvements.
Hard Fork Timeline
Input Output Hong Kong (IOHK), the company behind Cardano’s network, has released steady updates about when the Vasil hard fork will be ready — and they’re optimistic it will be imminent.
According to a tweet update they sent out last week, 75% of mainnet blocks produced by nodes are running the new fork, around 25 exchanges — representing 80% of liquidity — have upgraded their nodes, and key dApps have also accepted the recent fork.
Of note, the Stake Pool Operators (SPO’s) running the latest node now account for 42% of block production, more than halfway to the required 75%.
The initial roadmap for the Vasil upgrade targeted full implementation by May 19, with the official hard fork on June 29. The upgrade has suffered major delays as developers work to ensure the network transitions property. Cardano founder Charles Hoskinson detailed in a twitter livestream on Friday that ‘extensive testing’ is still being conducted, and the hard fork can be anticipated in mid-September.
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