Ethereum developers that are considering defecting to Cardano can now test their dApps on the growing blockchain platform.
Cardano’s Ethereum Virtual Machine (EVM) has full compatibility with Ethereum upgrades and tools, Web3 wallet compatibility, can use the Ouroboros Byzantine Fault Tolerance consensus protocol, and inherit security from Cardano’s main chain.
Cardano vs Ethereum
Ethereum is currently in the process of switching away from the energy-intensive Proof of Work algorithm to the greener and more scalable Proof of Stake. However, it’s proving a difficult task to safely transition a live system with tens of billions of dollars at, umm, stake.
An event called “The Merge” (when Ethereum will officially become a Proof of Stake blockchain) is tentatively set to happen in August, but that’s looking uncertain and won’t be an overnight solution to Ethereum’s high fees and slow transaction speeds.
In contrast, Cardano launched as a Proof of Stake blockchain and has spent years building on that core base. Instead of the “move fast and break things” ethos adopted by most centralised tech companies, Cardano’s developers have taken a very methodical approach (it’s published over 100 peer-reviewed papers) to try and build a platform that will last.
Post-merge, Ethereum will still only support around 15 transactions per second (tps) compared to Cardano’s 270 tps. For comparison, PayPal and Visa handle 193 tps and 1667 tps on average (but can scale much higher).
Cardano is also gearing up to launch its Hydra scaling solution which supports around 1,000 tps per “head”. Cardano currently has over 3,000 staking pools—meaning it could support three million tps if every pool set up a Hydra head.
Concerns have been raised around the Lido staking pool centralising Ethereum and putting it at risk. This has been highlighted by Danny Ryan, a researcher at the Ethereum Foundation and lead coordinator for the Ethereum 2.0 rollout:
Courtesy of Etherscan, we can see Lido accounts for 32 percent of Eth 2.0 beacon chain deposits:
Cardano’s pools are looking far more decentralised. The largest single operator is Binance (11%) but a healthy 2022 single pools make up the largest share (25.67%):
“We expect Cardano to be 50-100 times more decentralized than other large blockchain networks,” reads a passage on Cardano’s website.
“Current prominent blockchain networks are often controlled by less than 10 mining pools, exposing them to serious risk of compromise by malicious behavior – something which Cardano avoids with a system inherently designed to encourage greater decentralization.”
On the rise
Projects that were born on Ethereum, such as SingularityNET, have already begun moving to Cardano—citing reasons including the possibilities of its functional programming capabilities, use of the extended UTxO accounting model, and various frustrations with Ethereum.
Investors also appear to be looking favourably at Cardano.
According to CoinShares, outflows from Ethereum investment products totalled $41 million last week. In contrast, Cardano products increased by $200,000. While that’s not exactly a huge amount, it’s still impressive amid the current market sell-off.
Cardano also remains the closest to stealing Ethereum’s crown in total amount staked:
Ethereum continues to dominate all blockchain platforms in number of dApps, addresses, and the amount users are willing to “lock” in its defi apps, but promising rivals like Cardano are very much on the rise.
(Photo by Michael Förtsch on Unsplash)
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