Cardano: Vasil Hard Fork Breakdown

June 24, 2022


Cardano continues to innovate and improve its network. Faithfully following its roadmap, Cardano will soon be transitioning from the Goguen era to the Basho era (other eras here), which is all about optimization and performance improvement. The Basho era focuses less on adding new functionalities and more on enhancing existing features and amplifying the network’s scalability to better support greater adoption.

The transition will be executed through two hard forks. The first ”Vasil Hard Fork” is scheduled for June 29, 2022 and was named after the late Vasil St. Dabov, friend of Charles Hoskinson and beloved Cardano Ambassador, as well as environmental activist and experienced blockchain consultant. See here for his homage. The second hard fork is called the “Chang Hard Fork” and it is planned for sometime in Q3/Q4 2022.

Below we break down the Vasil Hard Fork, slated for Epoch 347; according to founder Charles, everything seems to be on schedule. Both the network and its smart contract platform – Plutus – are set to experience significant improvements. You can read more about Plutus here.

Cardano Improvement Proposals (CIPs) are formal and technical communication processes that happen off-chain, designed to provide transparency and relay information to the community when addressing commonly mentioned issues within the ecosystem.

The Vasil Hard Fork will implement CIP-31 to 33, respectively “Reference Inputs”, “Inline Datums”, and “Reference Scripts”. Together they aim to decrease the size of  transactions on the network and bring to life Plutus 2.0.

A number of changes will be applied to Plutus scripts – a script is a program that decides whether or not the transaction that spends the output is authorized. You can read more about Plutus scripts here.

The way scripts work now, they have to be entirely copied and included as part of each new transaction that interacts with them, which makes for very long transactions and, consequently, decreased throughput to pass all that repeated data, also elevating fee costs.

Once “reference scripts” are attached to outputs, shorter addresses will be used in transactions because it will be possible to reference scripts that already exist on-chain, resulting in smaller transaction sizes and increased throughput. Several DApps will be able to read from the same data simultaneously and no longer will have to carry all of the app logic in each transaction. This makes for much lighter smart contract interactions, substantially lowering transaction costs.

Working in tandem with such change, data will now be allowed to be stored on-chain via CIP 32. Instead of datum hashes, datums can be stored directly in outputs, which can then be accessed and read by other applications – dramatically simplifying the process of referencing inputs.

Another CIP that should be implemented during the Hard Fork is the CIP-40, “Collateral Outputs”, which focuses on improving smart contracts experience.

Currently, executing a Plutus Smart contract requires a collateral amount, which means users must include a fee to cover the cost of executing the script. When a transaction fails validation, said collateral is completely lost. CIP-40 changes this by including just enough collateral in a transaction for it to go through and setting a limit to failed transactions, so it can only lose a minimum amount of collateral.

Basically, this change ensures bad implementations and failed transactions don’t result in loss of collateral funds. CIP-40 is still currently under review – unlike CIP-30 to 33 – and may still suffer some alterations before the Hard Fork. Here you can keep yourself check all current CIPs; approved and in review too.

For developers, all of this means improved smart contract capabilities; for the community, a better user experience. If you’d like to read more about it, check here the twitter thread made by Sooraj, one of Cardano’s developers; here to read IOHK’s blog publication or here for their own twitter thread.

Another exciting feature to aid on the chain’s scalability is diffusion pipelining – which aims to improve Cardano’s scaling prowess by facilitating faster block propagation on the consensus layer.

Currently, a block propagates through six steps as it moves across the chain in an orderly sequence that never changes. As one of the biggest challenges faced by all blockchains, block propagation takes a significant amount of time, especially if you consider the ever increasing number of blocks.

Diffusion pipelining overlays parts of those six steps, so they happen concurrently. Validators can pre-notify their peers and give them a block before it is fully validated; the next peer starts pre-fetching the new block body and can get ahead by the time it’s fully transitioned, improving the consistency of block propagation times.

This enables greater gains in headroom and dramatically saves time, which allows for more aggressive scaling changes such as increasing block size and Plutus parameter limits.

If you’d like to read more about diffusion pipelining, here’s an article on the matter written by John Woods, director of Cardano Architecture.

According to Charles Hoskinson, a couple more features carried off-chain are to follow, contributing to the mission of improving the network’s prowess and connectivity – UTXO on-disk storage and Hydra among said features, but the Vasil Hard Fork might be too early for their implementation. As they are part of Cardano’s scalability roadmap, they might come later in 2022. Read more about it here.

Whether or not these changes will be reflected on the price market is yet to be seen, but one thing’s for certain: the Vasil Hard Fork decidedly strives for better DeFi usability and ignites  potential changes for the network’s scalability, elevating Cardano’s competitiveness in the space.


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