Cardano to Increase Block Size as New Dapps Overload Network

Neither the author, Ruholamin Haqshanas, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

Input Output (IOHK), the firm that developed Cardano, has announced plans to increase its network’s block size by 11%. The move comes at a time when increased usage from newly-built Dapps has started to congest the network and slow down Plutus, the network’s smart contract platform.

IOHK to Increase Cardano’s Capacity

IOHK recently revealed on Twitter its proposal for a parameter update that would increase the block size of the network from 72KB to 80KB.

In blockchains, blocks form the basic data structure and store the details of all transactions. Larger blocks can store more transactions, and can positively affect the network’s overall speed and capacity. However, very large blocks can make full nodes more expensive to operate and can lead to centralization. 

IOHK has also put forward a proposal that would increase the amount of data that can be included in a single transaction on Plutus. The proposal would increase Plutus’ script memory units per transaction from the current 12.5 million to 14 million, an increase of 12%. The proposals are slated to go live at around epoch 319 on February 4 at 21:44:51 UTC.

IOHK claimed that these updates will jointly provide additional resources for Cardano’s smart contract platform to improve the decentralized application (DApp) user experience while increasing overall network capacity. It said:

“This adjustment forms part of a planned series of network optimizations. Cardano will continue to be steadily optimized in a series of measured steps this year, carefully & methodically scaling Cardano for future growth as demand increases.”

Cardano Experiences All-Time Highs in Network Activity Leading to Overload

Cardano entered the smart contract arena last September after its Alonzo hard fork went live. The update was critical as it provided a framework for creating decentralized apps on Cardano, and also made it more easily programmable for the developer community.

So far, over 1,100 DeFi applications have been built on Cardano’s Plutus. Most notably, the network onboarded over 100 smart contracts in just two days recently. Sundaeswap, the first decentralized exchange (DEX) on Cardano, also went live last month. Following this significant growth, Cardano started to face network congestion issues. 

For the entirety of last week, Cardano’s average blockchain load—the amount of memory space being filled within the average Cardano block—was over 90%. Data from Cardano Blockchain Insights reveals that blockchain load spiked on January 14th, rising from 55% to more than 91% over the course of two days.

This is clearly a sign that Cardano blockchain’s adoption is quickly growing. Still, the network’s native token has not been performing well. In fact, the coin is down by around 60% compared to its all-time highs. Even the launch of the network’s smart contract functionality didn’t considerably affect ADA’s price movement. 

As of now, however, ADA is in green as the coin has slightly moved higher following the news. At the time of publishing, ADA is trading at around $1.05, down by around 0.85% over the past 24 hours. 

Cardano vs. Ethereum: Smart Contract Wars

Both Cardano and Ethereum support smart contracts, but the former aims to take the thing to the next level by providing higher speeds and broader interoperability. Cardano aims to allow anyone, not just developers, to have access to smart contracts and be able to create their own decentralized applications.

While Cardano’s smart contract plans are still largely in development, it is sometimes referred to as an “Ethereum killer.” That is because it seeks to address deficiencies of the second-largest cryptocurrency by offering significantly cheaper fees, better scalability, and higher transaction throughput.

However, despite its promising future, and the fact that it is created by an Ethereum co-founder, Cardano still has a lot to prove. As of now, there are around 3,000 DApps built on Ethereum, compared to only 62 Dapps that have been built on Cardano. Furthermore, Ethereum is also blessed with a first-mover advantage, as the majority of popular DeFi protocols reside on it. 

Do you think Cardano can live up to its smart contract ambitions and scale as adoption grows? Let us know in the comments below.

About the author

Ruholamin Haqshanas is an accomplished crypto and finance journalist with over two years of experience writing in the field. He has a solid grasp of various segments of the FinTech space, including the decentralized iteration of financial systems (DeFi), and the emerging market for non-fungible tokens (NFTs). He is an active user of digital assets for remittances.