Cardano's Smart Contracts Face Major Scalability Issue
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Cardano's Smart Contracts Face Major Scalability Issue

THELOGICALINDIAN - The barrage of acute affairs on Cardanos accessible testnet has shone a ablaze on old agreement architecture challenges

Cardano, the third-largest cryptocurrency with a bazaar cap of over $82.8 billion, has become the accountable of criticism as its ecosystem basement does not acquiesce for the best basal decentralized applications to action after adverse actual ascent issues.

Cardano dApp Developers Face Concurrency Issues

Cardano is adverse a above scalability hurdle.

Input Output, the development aggregation abaft Cardano, appear the barrage of the Plutus acute arrangement functionality on testnet aftermost Thursday. Since the amend went live, Minswap, the aboriginal decentralized barter to barrage on testnet, has run into astringent ascent issues, adopting apropos about Cardano’s adequacy to run acute contracts. 

Users testing Minswap were afraid to acquisition that the dApp could alone handle one transaction per block. “Looks good,” one Reddit user wrote. “But back I try to bandy things, all I’m accepting is ‘Transaction fail: UTxOs are actuality acclimated this block. Please delay 20-40 abnormal and try again.”

“After we launched, some users took screenshots accompanying to bound UTXOs on Twitter, and the blow is history,” Minswap architect and engineering advance Long Nguyen told Crypto Briefing. He added that Minswap congenital their agreement on Cardano because “it’s the best decentralized Proof-of-Stake chain, with added than 3,000 nodes actuality run by the community, and 66% actuality run by distinct bulge operators.”

Be that as it may, it would arise that architecture scalable, absolutely on-chain decentralized applications on the blockchain has become a bigger claiming than abounding in the association had anticipated. Specifically, clashing Ethereum, Solana, and best added acute arrangement enabled-blockchains, which apply an account-based archetypal to compute transactions, Cardano employs a atypical abundance of Bitcoin’s UTXO archetypal alleged Extended UTXO (EUTXO).

The EUTXO archetypal poses challenges for Cardano dApp builders because of a alleged accommodation “issue.” In simple terms, accommodation refers to the adeptness for assorted altered agents to collaborate with the aforementioned acute arrangement at the aforementioned time. 

Account-based models acquiesce assorted users to collaborate with the aforementioned acute affairs by default. However, EUTXO-based acute arrangement blockchains affectation difficulties for developers to abate accommodation after authoritative compromises on aegis or decentralization. 

Solutions for accommodation accommodate architecture dApps that abide segmentations of accompaniment or accumulation assorted interactions to achieve on the aforementioned state. For decentralized exchanges, this would beggarly either fragmenting clamminess into assorted pools (states) or application third-party sequencers to accumulation assorted affairs and achieve them as one transaction in the aforementioned state.

The above acutely amercement basic efficiency, while the closing could potentially prove to be a applicable solution. Maladex is a Cardano-based decentralized barter that claims to accept solved concurrency. Discussing the abeyant downsides of application sequencers to abate concurrency, Jarek, the project’s CEO and advance developer, told Crypto Briefing: 

“Other than, depending on the way it’s implemented, amount of absorption bottleneck, [there are] none. Off-chain is a accustomed allotment of the ecosystem and aloof prepares affairs for the blockchain area again they’re accurate and executed.”

“There is this afflictive allotment that it ability access centralization,” he added. “But it isn’t any altered than the absorption we’ve got with UI for anniversary protocol.” 

Jarek added argues that application dApp-layer sequencers can abate front-running and MEV attacks because they accumulated assorted affairs to be accomplished at once. 

However, Chief Investment Officer at Arcane Assets and vocal Cardano critic Eric Wall argues that MEV would still be accessible if the blockchain acclimated a sequencer. Explaining how MEV could action on Cardano, he told Crypto Briefing:

“First of all, the sequencer can abstract MEV by allotment to accommodate one transaction (his own) but abridge another. Secondly, the miner/validator on the Cardano abject band can attending at a sequencer’s accumulation of affairs and adios genitalia of it or the accomplished accumulation if he’d rather accomplish some of those affairs himself back he’s putting the block together.”

Other proposed solutions for ascent dApps on Cardano absorb implementing Layer 2 protocols and sidechains, which accord with their own different absorption and aegis challenges (while such solutions are yet to go alive on Cardano, at atomic one EVM-compatible sidechain is in the pipeline). 

The big catechism is whether Cardano—given its EUTXO-based architecture choice—can abutment scalable and capital-efficient decentralized exchanges congenital absolutely on-chain. While Maladex claims accommodation is “complete and absolute FUD,” Eric Wall argues that it’s absurd Cardano dApps will break accommodation after authoritative cogent aegis or absorption sacrifices. He told Crypto Briefing that while dApp developers could acquisition workarounds, they may absorb “significant development challenges, UX challenges, or centralization.” 

The Cardano association has hailed Alonzo as a above new footfall for the blockchain’s DeFi capabilities. However, the testnet after-effects advance that it could be at atomic a few added years until it lives up to its promise. Once the advancement ships, there won’t be an access of DeFi protocols. Instead, Nguyen thinks it will attending like Ethereum did in 2024. “The acceptable and best dApps will boring arise over the years to come,” he said.