What will Cardano’s Vasil hard fork bring?

The second update of Cardano blockchain’s much-anticipated Vasil hard fork is likely to take place soon. Vasil is a backward-incompatible upgrade taking place on the main network intended to enrich smart contract capabilities, increase the chain’s throughput and reduce costs.

This update will see Cardano’s scripting language Plutus version (v)2 Cost Model available on its Mainnet. Plutus is Cardano’s native smart contract language. As the foundational layer of Cardano, Plutus efficiently separates the code that drives smart contracts, which remains off-chain and runs on a user’s machine, from the on-chain validation of transactions. 

Ahead of the upgrade, Artano, a Cardano-based NFT project, released the results of its tests, and they appear promising — With Plutus v2, script size has been reduced by more than 90% and the corresponding cost for transactions has been reduced by more than 75%.

What is the Vasil hard fork?

Named after Vasil St Dabov, a much-loved and respected Cardano community member, Vasil is a major upgrade designed to increase Cardano’s scaling capabilities and reduce transaction costs, and had originally been scheduled for a June release on a test network. 

According to Input Output Hong Kong (IOHK), the developer of Carnado, Vasil is the most ambitious update program for Cardano to date. The upgrade will bring significant improvements using Cardano’s hard fork combinator (HFC) approach and enhance the network’s performance by increasing throughput, script efficiency, and reducing latency in block transmission. 

According to IOHK, with such a complex upgrade with multiple stakeholders, the team needed to be confident the ecosystem was ready and prepared before any hard fork was triggered. For this mainnet upgrade to be triggered, the IOG & Cardano Foundation teams tracked three critical mass indicators and launched on September 22 after these indicators had been met: 

  • 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. 

Vasil – the most unique hard fork

Normally, a hard fork splits a blockchain in two, changing the blockchain protocol with new rules. These changes are not backward compatible and blockchain history will no longer be available. In addition, it requires the node to upgrade the software and the blockchain to restart after a successful upgrade. However, the HFC approach makes the hard fork on the Cardano blockchain different from the norm, as it enables the transition to new protocols without blockchain splits or restarts. Moreover, both old and new rules are kept on the blockchain. The protocol changes to the new rule, but the history of the previous blocks are preserved. 

The Vasil hard fork will contain blocks from earlier eras, including Byron, Shelley, Goguen, and Basho. Moreover, moving from one protocol to another (for example, Ouroboros Praos to Genesis) does not require node upgrades. In fact, since the blockchain supports old blocks, nodes can be progressively upgraded after a hard fork.

What will the Vasil hard fork bring?

In the past, Cardano was often criticized as its smart contract capabilities were seen as lagging behind that of Ethereum and other Layer 1 blockchains with their thriving decentralized finance (DeFi) communities. 

Different from Ethereum, which uses an account-based model, Cardano is based on the “unspent transaction output” (UTXO) system associated with Bitcoin, a way of calculating what’s held in users’ wallets by keeping tabs on the change left over when coins are spent.

Vasil’s changes to the Cardano ledger will allow inputs and UTXOs to be used for script contracts without spending them. In other words, facilitate access to the information stored on the blockchain without having to spend and recreate the UTXO as before. Adjusting the way referenced scripts are handled can significantly reduce the size of the transactions in which they are run, which previously led to processing delays.