With Mary’s hard fork around the corner, the Cardano blockchain will soon see some big changes. Both include forging tokens and a multi-asset ledger, all of which pave the way for decentralized applications (DApps), native tokens, and DeFi usage cases. This was the route map highlighted by Elliot Hill of the Cardano Foundation in a recent article.
According to Hill, DeFi on Cardano will see lower transaction fees as transfers between native tokens and properties do not incur execution fees due to the way they are implemented on the chain.
Hill also asserted that Cardano differentiates itself from other blockchains by its ‘native’ token support, in which tokens do not need a smart contract to run and instead use token logic that relies directly on Cardano’s ledger. User-defined native tokens would make it easy to forge DeFi tokens without the need for custom coding, he said.
It should be remembered that Cardano has started to accept DeFi projects through Project Catalyst, a community-based fund with over $500,000 in funds to promote platform initiatives.
A result of Project Catalyst was Liqwid Finance, the first DeFi application to be built on Cardano. Liqwid Finance is an algorithmic protocol for lending and automated liquidity provisions that was unveiled a few weeks ago.
— Liqwid Finance🔴 (@liqwidfinance) January 25, 2021
However, although the idea of DeFi on Cardano seems highly appealing in principle to those in the community who claim that it will compete with Ethereum as a forum for DeFi protocols, the truth is that it is still in the early stages of growth. Unlike other open networks such as Ethereum and Polkadot, any real implementation is yet to take place. This is partly because developer frameworks, such as the Pluto Framework, have yet to be made available.
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