Cardano [ADA] had a sporadic rise in the 2021 summer. After decoupling from Bitcoin [BTC], ADA went on to post an astonishing rally that only a few alts could mimic. But the token’s price action is a classic example of “buy the rumor, sell the news.”
ADA’s strength over the past couple of weeks displayed immense potential, but as the highly-anticipated development of the Alonzo upgrade arrived, the crypto-asset flashed red. As a matter of fact, ADA was down by 6.38% over the past 24-hours which drove its price to $2.42.
What is Cardano’s Alonzo upgrade?
Infrastructure-wise Cardano’s wait for smart contract capabilities is over. The arrival of Alonzo essentially means that the network is now ready to host smart contracts, thereby facilitating different teams and projects to begin creating and deploying their protocols directly on the public blockchain for the very first time.
The official blog post by IOHK announcing the upgrade stated,
“It’s only just the beginning. But this is still a moment for celebration. As a community, we have been on an incredible journey together. Rightly, we should allow ourselves to acknowledge the tremendous efforts made by so many to get here. This will also be a time for reflection on the challenges we’ve collectively overcome.”
According to IOHK, the Byron reboot in March 2020 set the stage for the Cardano network by implementing a robust and scalable code base on which to build. The following Shelley upgrade transformed the network from a federated model towards a decentralized one. This year’s Mary upgrade helped create a multi-asset network and introduced native tokens.
Cardano’s latest Alonzo upgrade was deployed with the help of hard fork combinator [HFC] technology, which combines two protocols into a single protocol. This isn’t the first time, that Cardano has leveraged this tool. In fact, HFC was used in previous upgrades as well.
The development arm of Cardano also revealed having the “backbone for a new decentralized application platform” by enabling Plutus scripts to be written and executed on-chain that would pave the way for numerous decentralized applications [DApp] and decentralized finance [DeFi] use cases.
It’s still early
Cardano has never been able to escape FUD and has drawn severe criticism from Ethereum developers. TWJ had earlier reported the backlash Cardano received over the Minswap drama. Pointing towards the inevitability of poor development teams behind decentralized platforms, poor coding practice, and the presence of bad actors, IOHK stated,
“Let us be clear. There will be bumps in the road. Early user experiences might not be perfect. Some early DApps will have issues. We’ll see some great development teams and some poor ones. This is a permissionless, decentralized blockchain, so this is inevitable.”