The long-awaited upgrade ‘The Merge’ of Ethereum was getting closer when Charles Hoskinson, the founder of Cardano and former co-founder of Ethereum, announced Cardano’s Vasil Hard Fork would occur on September 22. The month of September 2022 seems to be a historical month for the Web3 ecosystem.
Here are five things you should know about the clash of the two titans and how it will impact the blockchain ecosystem:
1. The Merge and Vasil Hard Fork: Biggest upgrade in blockchain ecosystem
Ethereum’s The Merge is scheduled for September 15,, which is the transition from proof-of-work (POW) to proof-of-stake (POS). Like Bitcoin, Ethereum has been on a proof-of-work consensus mechanism since it was launched in 2015. the Merge represents the joining of the existing execution layer of Ethereum (the Mainnet as used today) with its new proof-of-stake consensus layer, the Beacon Chain.
Cardano’s Vasil hard fork will be the biggest upgrade on the Cardano network. While announcing, Charles said, “What’s so amazing about that date is it randomly and just so happenly [sic] falls on the independence day of Bulgaria”. Cardano’s Vasil hard fork is named after its late Bulgarian community member Vasil St. Dabov who passed away in December 2021. He was the Chief Blockchain Advisor at software R&D firm Quanterall.
Cardano is a proof-of-stake blockchain platform: the first to be founded on peer-reviewed research and developed through evidence-based methods. Ada Is the native token Of Cardano.
2. Resolving the biggest issue – Huge energy consumption
Bitcoins and Ethereum ’s potential negative implications for climate change due to the high energy consumption are always been criticized. Bitcoin and Ethereum operate on Poof-of-work (POW), a consensus mechanism in the decentralized blockchain network. POW needs people called miners to solve very complex puzzles. Once solved, they get rewarded. It is used widely in cryptocurrency mining, for validating transactions and mining new tokens. This mechanism is the backbone of peer-to-peer transactions in a secure manner without the need for a trusted third party or other cryptocurrencies.
POW requires a significant amount of energy to verify transactions since it involves a lot of validators, It makes it less environmentally friendly than other systems. This is the reason why it has been banned by many countries. As the energy is primarily sourced from fossil fuels across the world, the resulting carbon footprint equals those generated by medium-sized countries.
PoS is comparatively energy-efficient. After the Merge, Ethereum will transition to Proof of Stake. POS was created as an alternative to POW, the original consensus mechanism used to validate a blockchain and add new blocks. In POS, validators are chosen based on a set of rules depending on the ‘stake’ they have in the blockchain. According to Vitalik Buterin, the network could process 100,000 transactions per second, a considerable increase from the current state. Currently, Ethereum can only process about 12 transactions per second right now. Under the current proof-of-work consensus mechanism, Ethereum uses ~112 TWh of energy per year. That’s on par with the Netherlands.
Cardano is a proof-of-stake blockchain platform. The Vasil Hard Fork will bring increased network capacity and lower-cost transactions.
3. The network upgrades: Scaling DeFi’s use cases and increasing levels of utility
Ethereum is a programmable blockchain that finds applications in numerous areas, including DeFi, smart contracts, and NFTs. Experts believe that ‘The Merge’ could act as an anchor to pull a DeFi ship afloat. Ethereum’s objective is to become the world’s decentralized computing platform. The blockchain introduced smart-contract functionality when it was launched in 2015.
Other blockchains like Solana, Cardano and Binance Smart Chain have their share of the DeFi market, but Ethereum still reigns supreme. After the merge, the DeFi space will see a boost as it will lead to scalability resulting in mass adoption.
Cardano’s upcoming Vasil update possibly will handle a large number of transactions, improving the scalability of the network. Founder Charles Hoskinson was quoted in the media that several decentralized applications (dApps) were waiting for the Vasil hard fork to launch to benefit from pipelining. Announcing the Vasil date, Charles said, “It really demonstrated that we need to build better processes and, you know, better foundations to launch things at this scale and magnitude…We kind of pushed the limit a bit on Vasil.”
4. Scaling Up for pushing mass adoption
Web3 Apps and products are technologically very complex and hence are not accessible to the majority of users. Following the Merge, Ethereum plans to undergo the Surge, Verge, Purge, and Splurg – these will help with Ethereum’s scaling and evolution. These are necessary upgradation to build a blockchain for increasing utility levels.
The Vasil upgrade will also bring enhancements to Plutus to enable developers to create more powerful and efficient blockchain-based applications.
Input Output and the Cardano Foundation, in an article on the website, gave further details:
Vasil is the most ambitious update program for Cardano to date. With such a complex upgrade with multiple stakeholders, we need to be confident the ecosystem is ready and prepared before any hard fork is triggered. For this mainnet upgrade to be triggered, the IOG & Cardano Foundation teams will be tracking three critical mass indicators the community will need to reach:
- 75% of mainnet blocks being created by the final Vasil node candidate (1.35.3)
- Approximately 25 exchanges upgraded (representing 80% of ada liquidity)
- Top 10 DApps by TVL confirming they have upgraded to 1.35.3 on PreProduction and are ready for mainnet.
Once everyone is comfortable and ready, in close collaboration with the Cardano Foundation, the IOG team will trigger the upgrade for the Cardano mainnet.
5. ‘Community’ at the core of these network upgrades
Very true to Web3 ethos, community remain at the core of these upgrades. As a reminder, Blockchains are decentralized and run on open-source software. Since it is open-source, the community can make changes to the blockchain protocol. This is where a fork happens. If the changes are radical and are no longer compatible with the existing one, then a split happens. This is called Hard Fork.
The Merge and Vasil upgradation are by the community and for the benefit of the community. they will definitely bring a complete transformation to the Web3 ecosystem, and again the winner will be the community.
