The Occam.fi Technical Series: The Alonzo Hard Fork
A deep dive into the start of the Goguen Era
Written by @Conorxdevlin, Technical Writer
This post is the fourth in Occam.fi’s technical series. Here, we will deep dive into the overall timeline of the Alonzo hard fork, explore the major features introduced by Alonzo, and examine some interesting details and important implications as we head into Q3 and Q4 of 2021.
We will also discover what the next few years look like as Cardano’s long-touted answer to Ethereum is finally manifested! Without further ado, let’s jump in.
The Alonzo Timeline
The Alonzo hard fork, scheduled to occur sometime in late August or early September of 2021, signifies the end of the Shelly Era. But perhaps more importantly, Alonzo marks the third and final hard fork of the transition from Shelly to Goguen.
With the advent of the Shelly Era, we became familiar with many new features of Cardano, such as staking, stake pools, and large improvements to Cardano’s PoS protocol Ouroboros. Shelly itself officially launched on the 29th of July 2020 and since then we’ve seen two major hard fork events, Allegra and Mary.
In December 2020, Allegra introduced a token locking mechanism as part of Project Catalyst and Voltaire, the treasury system for Cardano. Following this, the Mary hard fork occurred in March of 2021 and introduced multi-assets and Cardano Native Token support, as well as NFT functionality and trading capabilities.
Alonzo is therefore the final hard fork event and once it happens we will officially be in the Goguen Era and Cardano will finally support smart contracts.
The Alonzo Phases
Pictured above in Figure 1 is the timeline for the specific phases of the Alonzo hard fork event, culminating with the full hard fork in September marked by the ‘Alonzo Mainnet’.
Through ‘Alonzo Blue’, we saw the first smart contract testnet debut with less than 50 technical users who were primarily stake pool operators (SPOs). We are now currently in ‘Alonzo White’, which adds more features to the original testnet from Alonzo Blue but also incorporates a wider range of Cardano community members to the access roster.
‘Alonzo Purple’ is the next upcoming phase, during which Alonzo becomes a fully public testnet in which all members of the Cardano and wider crypto community can partake. Then comes Alonzo Red and Black, where bugs and flaws discovered through previous phases are addressed and fixed.
Lastly, the final quality assurance occurs during the staging of the hard fork event, the code is practically frozen, exchanges are prepped for the hard fork, and the Goguen Era begins in earnest. But what does it all mean?
Alonzo’s Direct Implications
The Alonzo hard fork is named after ‘Alonzo Church’ (1903–1995) an award-winning American mathematician and logician, considered to be one of the founders of computer science. He invented the Lambda Calculus, which plays a substantial role in Haskell, the programming language upon which Cardano is built.
Through Plutus, the smart contract language which goes live through the upcoming hard fork, Alonzo Church’s Lambda Calculus lives on as Plutus Core is very heavily influenced by the principles set out by Lambda Calculus.
The three key features of Alonzo which are designed to fully realize smart contracts for the Cardano Ecosystem are Plutus, Plutus Core, and Marlowe.
Plutus is the development and execution platform, using Haskell, designed to enable the creation of smart contracts for Cardano. Plutus and Haskell make use of the same codebase for off and on-chain development, rather than having to make use of two or more different languages for other blockchains.
Furthermore, since Haskell is a functional programming language, it will significantly reduce the ambiguity inherent in more imperative language-based smart contracts. Plutus contracts are therefore more secure and permit more rigorous testing, which is essential for modelling enterprise-level business and finance scenarios, potentially hosting large organizations, legal systems, and governments as Cardano continues to make headway into the developing world.
Plutus Core is the low-level scripting language that directly interacts with Cardano’s settlement layer and computation layer and governs the interactions between the smart contract scripts and the Cardano blockchain. Developers write their Plutus code and smart contracts which are then compiled to Plutus Core, where the code is simplified and concise allowing for better digestion by the Cardano blockchain.
Marlowe is a domain-specific language (DSL) for creating financial smart contracts and is designed for professionals and experts in financial, legal, and other non-technical fields. Marlowe is built on Plutus and Haskell and one can think of it as a ‘plug-and-play’ version. This allows the user to create and test smart contracts and deploy them to an emulator, before potentially putting them on the Cardano blockchain. The Marlowe playground emulator is already available for users to test their own financial contracts.
While Marlowe has a rather straightforward approach, Plutus has a much steeper learning curve. But luckily there exists a plethora of documentation, articles, tutorials, and videos covering Plutus, and Occam.fi recently published an article detailing some of the ways to get started learning Plutus! Additionally, IOHK has produced Udemy courses for Plutus and Marlowe, alongside their free Plutus eBook.
In the aforementioned Mary hard fork event, we were introduced to the Cardano Native Token (CNT) as well as NFTs, and we currently have basic support for minting, burning, and sending those CNTs and NFTs. However, aside from that, there’s not much one can do with Cardano native assets at the moment.
With Alonzo, the multi-currency ledger will finally be fully realized and the Cardano blockchain will fully support these CNTs and NFTs, much like Ethereum currently does with its ERC token standards. However, Cardano’s system will allow for much cheaper fees, and a simpler over transaction process as each CNT is natively supported by the Cardano blockchain. We have also written an article covering many of the differences between CNTs and ERC tokens, which can be found here.
The Goguen Era and Beyond
With the direct additions to the Cardano ecosystem aside, what are the future implications of smart contracts for Cardano? Well, we can already see an ‘arms race’ of sorts already being waged when it comes to potential decentralized exchanges and who is going to be the best, fastest, or most secure.
At Occam.fi, we recently released our whitepaper for the OccamX DEX which is the next major step for our ecosystem. DEX wars aside, one only has to look at the current major pillars of the Ethereum ecosystem to get a glimpse of what’s to come for Cardano. Projects such as AAVE, Bancor, Balancer, MakerDAO, and Uniswap etc are just some of the many projects which could be deployed, iterated upon, or even significantly improved in the Cardano ecosystem.
Moreover, due to the low cost of transactions on Cardano, projects such as World Mobile Chain which are focused on building out cellular infrastructure in Africa can finally realise their vision. This will help bring Cardano to Africa and beyond, and during the next few years work to include African nations into the developed world through the blockchain.
Looking towards August, September, and October, we have a lot to look forward to in the Cardano ecosystem. There are tens of projects that are projected to release soon after, if not alongside, the Alonzo hard fork event later this year. Above, Figure 3 shows most of the currently known projects expected to release, but more and more go public each week. By extension, being a part of the Occam.fi community and staking OCC tokens allows you to be a part of some of the most interesting and promising projects like deFIRE, THEOS, Iagon, and CardWallet to name a few!
What Lies Ahead?
The next few years are shaping up to be extremely exciting for Cardano as we’re not only going to witness the various previously mentioned dApps being built and going live, but also the expansion of Cardano into more emerging markets in Africa, South America and Asia.
As Charles Hoskinson discussed in his Africa Vision video, dApps building on Cardano could eventually compete with many pre-existing companies, while granting local people in developing nations the ability to achieve economic empowerment. While dApps focused on lending many not seem revolutionary to a New Yorker or Londoner, to the farmer in Ethiopia or a fisherman in Uruguay having direct and unfettered access to those capital resources is a valuable resource for growing their businesses and livelihoods. DeFi dApps on Cardano could even help elevate communities out of poverty.
There have been quite a few successful smart contract blockchains to date, but they have largely focused on already developed nations. With IOHK’s vision now paired with Cardano’s smart contracts, many financial products built for the developed world will finally be available at a much cheaper price to those in emerging economies. This in itself could pay massive dividends for years to come.
Essentially, Alonzo is finally bringing what everyone within the Cardano ecosystem has been waiting for — smart contracts. dApps that are already building and will be built on Cardano are now going to have access to the Cardano mainnet, and will have the chance to onboard millions of users.
Against this backdrop, Occam.fi will seek to play a pivotal roll in Alonzo with our launchpad, Occelerator, the OccamX DEX and more!
Read more articles in the Occam.fi technical series:
