Cardano Vasil Hard Fork Upgrade

Cardano network is soon to go through a hard fork called Vasil Hard Fork. It is already running on a testnet, and the community is expecting it to be launched on the Cardano mainnet.

This hard fork is crucial for the network as it should significantly improve the capabilities and efficiency of the network in general. So far this hard fork is considered to be the most important for the project.

The hard fork was added to the testnet on June 2 and launched on the Cardano testnet on July 3. The mainnet upgrade is expected at the end of July.

What changes are coming?

One of the Cardano team members Sooraj explained the upcoming implementations.

The hard fork is coming with the following changes:

1. CIP-31 (Cardano improvement proposal) - Reference Input
   
   It will be unnecessary for DApps to recreate transactional output to access them as before.
2. CIP-32 - Inline Datum
   
   It will enable users and developers to store data on-chain. This change will push Cardano closer to truly decentralized architecture.
3. CIP-33 - Reference Script
   
   The Vasil Hard Fork comes with the CIP33 for the smart contract platform. It will allow reference scripts to be attached to outputs. It will make transactions more compact and, thus, will lower transaction costs.
4. CIP-40 - Collateral Output
   
   At the moment collateral is required while submitting a Plutus transaction. Normally, users do not use it. However, it may happen that users lose their Collateral because of some problem or an attack. The new implementation protects users' collateral from mistakes.
5. UTXO-HD
   
   This implementation will change the way the network will store databases. It will improve the network's performance. It also should help to support multi-assets.
6. Hydra Integration
   
   Hydra (Cardano's layer 2 scalability solution) will help Cardano to expand, it will solve the scalability problem, and maximize throughput.

What is the expected influence on the ADA price?

As we can see on the ADA logarithmic graph, the upcoming Cardano updates were taken by users as a positive event during which the ADA price showed a strong uptrend. Subsequently, after the launch of the update, the correction began. We have to consider the fact that every previous upgrade came out as a part of the general uptrend on BTC. In the case of the Vasil update, ADA demonstrated a small rebound from the price of $0.45 to $0.68, but within the global downward motion of the crypto market, the upward movement failed to hold.

If you look at the analytics of DeFi projects built on Cardano, there are just a few of them in comparison with other competing blockchains that are focused on scalability and simplification of work with smart contracts. The total blocked TVL of the blockchain has dropped from $300 million to $111 million. This fact indicates that the development of the Cardano platform is still trying to catch up.

Taking into account the update history of Cardano, in the short term we can expect a little upward movement of ADA price to levels of $0.65, $0.7 and $0.9 pending the launch of the Vasil hard fork. Still, we should not forget that ADA is now in the local downtrend amid a global decline across all cryptocurrencies.

Conclusion

The Vasil Hard Fork should increase the efficiency of the Cardano network, bringing more opportunities to investors and users. This upgrade addresses the most important problems existing in the project and will create a better atmosphere for the Cardano community.

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