The much-awaited Vasil Hard Fork Upgrade will hit the Cardano Blockchain on September 22, 2022. The Hard Fork will significantly impact the network’s transaction fees and mining rewards, and also affect the speed of transactions, while improving the scalability of Decentralised Applications (Dapp).
Says Rajagopal Menon, vice-president, WazirX, “It is designed to improve the network’s performance by increasing throughput, script efficiency, while reducing latency in block transmission.”
Initially, the upgrade was scheduled for June 2022, but now it is slated to come into effect on September 22, 2022. As many as 12 exchanges hold the majority of the ADA liquidity, out of which eight are ready for the upgrade, including Binance. At present, Cardano’s native coin, ADA is trading at 0.4513, down by 4.51 per cent in the last 24 hours.
Charles Hoskinson, the creator of Cardano and co-founder of Ethereum, has advised the community to switch to Daedalus 5, the most recent version of the wallet, which has significant bug fixes.
“It is going to improve the smart contract capabilities and validation of transactions on Cardano,” says Gaurav Dahake, CEO at Bitbns.
In order to validate transactions and secure the network from Denial-of-Service (DoS) attacks, the validators are rewarded portions from the transaction fees they process.
To address these issues, Cardano aims to integrate Hydra, a Layer 2 solution, which will run off-chain transactions. It will offer lower transaction fees compared to the main network, which will help the network to become truly decentralised, reduce latency, and boost transactions per second.
“It provides efficient means of processing transactions off-chain for a set of users, while using the main-chain ledger as the secure settlement layer, thus also guaranteeing security,” Menon adds.
Cost Of Transactions
The validators will be able to access previous information stored on the Blockchain much quickly, as they will save time by skipping spending and re-creating Unspent Transaction Outputs (UTXOs). It will save the cost of transaction.
“It will reduce transaction costs. Current transaction costs are around 0.17 ADA per transaction,” says Arjun Vijay, COO at Giottus, a crypto platform.
Scalability Of Decentralised Applications
The Vasil upgrade aims to create a better relationship between data and Blockchain by ensuring data to be easily stored on-chain. This feature will hugely impact the Blockchain’s capability to improve decentralised application, non-fungible tokens, and its native language, Plutus.
“Vasil is one of the major updates for Cardano, which impacts more than 1,000 decentralised projects and ADA, a crypto with a $17.3 billion market valuation,” Menon adds.
Speed of Transactions
The Plutus scripts has to be incorporated for validating a transaction. Due to the size of the script’s transactions, sometimes it could take more time than expected for the processing. Now, the Vasil Hard Fork upgrade will reduce the size of data, which has to written on a Block, and it will reduce the transaction fees, while significantly increasing the speed of the transaction.
At present, Cardano is the second fastest currency after XRP. It takes less than a minute for a transaction to process on the Cardano network, but it will take around 20 minutes for a Block’s validation, as it will ensures the transaction will be irreversible and fully secure.
“Transaction speed will increase/improve post the upgrade (transactions will become lighter in terms of number of items being validated or such), Cardano currently does 250 transactions a second,” Vijay adds.
Under the current Blockchain model, all wallet users have set collateral in order to interact with decentralised applications. Previously, the collateral amount was set to be 150 per cent of the transaction fees. If the validation failed, the Dapp user would lose all the tokens they are transferring through Dapp. But after the Vasil Hard Fork, if a Dapp transaction fails, they will be transferred to a specified wallet address.