Vasil Hard Fork. Technical Overview

💡 Here you can find more info on Vasil hard fork timeline and here is a general overview of the event.

Cardano is one of the biggest cryptocurrencies by both market capitalization and following, having been introduced to the crypto community in 2018. Since its genesis, Cardano has undergone numerous upgrades through hard forks on its blockchain. The next hard fork, which is called Vasil, is set for September 22, 2022, and will bring about numerous changes to the current Cardano blockchain. It is a unique blockchain in that it executes a hard fork every year (sometimes even multiple times), unlike many other blockchains that do so quite infrequently.

Cardano’s eagerly anticipated incorporation of smart contract functionalities was made possible by the previous Alonzo hard fork, that went live a year ago. The Alonzo hard fork let developers build decentralized applications on top of Cardano by making the blockchain programmable, also enabling decentralized finance. Smart contracts are stored on a blockchain and run autonomously when criteria are satisfied, enabling big applicational use cases to a blockchain.

Now, with the Vasil Hard Fork, the network will be optimized for speed and throughput to function better, in particular for dApps. It will feature:

• Diffusion Pipelining
• Plutus optimization.
• Wallet UX optimization,

Diffusion pipelining speeds up the propagation of blocks in the network by allowing block validators to propagate the block before it is fully validated.

Before, the sequence was the following: receive block, check the block body (the most time consuming part), send it further. Now, once the block is received, the node validates the reference between the block header and body and, if correct, propagates it and starts checking the body contents.

This increases throughput on the Cardano blockchain, enhancing the scalability and the performance of the network.

Plutus optimisation CIPs (Cardano Improvement Proposals) in the Vasil hard fork also focus on improving speed and throughput.

CIP 31 allows referencing (reading) the script (additional text, conditions) in the EUTXO (the coin) without spending it. Hence, it saves the extra transaction time and fee.

CIP 32 allows a choice between whether the script in the EUTXO is saved in the form or hash or directly as an “inline” text. Generally, hashes are used since they are shorter and save time/space. However, for example a hash of a simple number can be longer than its contents, so now Plutus is smart enough to choose.

Finally CIP 33, by using functionality provided by CIP 31 and CIP 32 this allows it to make a reference to “unspent and inline” script without sending it over and over in the transactions.

💡 Plutus is the smart contract language used for Cardano. It uses the most popular purely functional programming language, Haskell, as the foundation for a secure, full-stack programming environment. Haskell was used in composing this Turing-complete language. Using Plutus, you can trust that your smart contracts will be carried out correctly.

💡 UTXO and EUTXO. Cardano uses the extended UTXO accounting model (EUTXO) that extends the (U) unspent (TX) transaction (O) output (UTXO) accounting model. This is (commonly used in Bitcoin). In the UTXO model, a transaction has inputs and outputs, where the inputs are unspent outputs from previous transactions. As soon as the output is used as input in a transaction, it becomes spent and can never be used again. An address specifies the output (a public key or public key hash) and a value (consisting of an ADA amount and optional, additional native token amounts). EUTXO extends the UTXO model by allowing output addresses to contain complicated logic to determine which transactions can unlock them and also by adding custom data to all outputs. This model offers unique advantages over other accounting models. For example, the success or failure of transaction validation counts only on the transaction itself + its inputs and nothing else. The validity of a transaction can be checked off-chain before the transaction is sent to the blockchain.

Wallet UX optimization is covered by CIP 40:

Alonzo upgrade introduced collateral put up with a smart contract to cover the potential cost of their failure. However, it was limited to ADA only and could be spent only in full, without change. This was a problem for wallets interacting with dApps, that generally use tokens. To combat this, wallets were implementing local solutions which was not a great UX. The CIP 40 removed these restrictions.

It has been reported that The Vasil hard fork will be followed by another hard fork, the Basho hard fork. Basho’s main concerns will be interoperability, scalability, and general network optimization.

Today approx. 86% of nodes report from same newest version, and are up to date. 25 exchanges with Cardano have upgraded (c. 80% of ADA liquidity) and the top 10 DApps by TVL have also confirmed readiness to implement the Vasil fork.

If you want to see a countdown, that can be viewed here. We will continue to observe.

The article was prepared by Jonatan Blum from Observers Community.