IOHK, the global blockchain research and development company and creators of Cardano, has successfully completed an upgrade to the Cardano blockchain that will allow it to handle non-native blockchain-based assets, or tokens, natively. This solution allows any token from another blockchain to be represented on Cardano without the need for smart contracts or custom code. It also enables those assets to behave in a similar way to Cardano’s currency, ada, meaning that projects can take advantage of Cardano’s speed, security and reduced transaction costs.
The need for custom code and smart contracts for tokenization has long been a barrier to entry for developers wanting to build blockchain applications, as it adds a layer of complexity, cost (other chains require smart contracts to execute for tokens), and inefficiency, as token code for both standards is replicated and adapted, rather than being part of the system itself. It also leaves room for human error. If custom code is done sloppily, it can introduce bugs that could lead to financial loss, as was seen in 2017 when software bugs led to the loss of $300m worth of Ethereum’s cryptocurrency.
IOHK’s solution for Cardano represents a key milestone in the journey towards full smart contracts functionality on the blockchain, rolling out in the coming months. Following the native tokens launch, projects will begin building on Cardano, with blockchain-based lending platform Celsius Network and SingularityNET, the world’s first decentralized AI network, among two of the projects who have already announced their intention to build on the blockchain.
“Native tokens are a crucial step in the rollout of smart contracts on Cardano, allowing businesses and developers to benefit from the increased security, flexibility and lower costs that a multi-asset enabled Cardano offers,” IOHK product director Aparna Jue said. “Over the next few months, we expect to see a range of promising use cases for the utility of Cardano come to life.
“It’s not just native tokens this week, along with rapid expansion of Cardano’s funding mechanism, Project Catalyst, Cardano is now 88 per cent decentralized, bringing us one step closer to not only having the world’s most advanced blockchain, but one whose future development is decided by its community.”
