"">Blockchain ecosystems can’t effectively operate in isolation forever.

With increasing adoption of distributed ledger technology (DLT), that is blockchain and blockless technologies, and the rise of alternative but equally effective decentralized solutions, cross-chain ledgers are expected to play a big role in blockchain interoperability in 2022 and even find more acceptance in 2023.

Blockchain Interoperability is the Future

Interoperability is a blockchain feature enabling a public network to share data and communicate with each other effortlessly. Whenever a blockchain has cross-chain capabilities, the dApp ecosystem will boom and the technology will find more reception.

Because of ledger compatibility, a user in one network, like Ethereum, can also quickly send data to another equally secure and open-source network, like Cardano, with the receiving user having no trouble interpreting data.

It is the infinite possibilities arising when fully decentralized blockchain networks swiftly share information that has, in recent days, seen more developers prepare their systems to be interconnected by default.

The ERC-20 Cardano Converter Tool

Input-Output Global (IOG) — the developers of Cardano, together with their development partners, are at an advanced stage of development and will soon release the ERC20 to Cardano Converter tool. They believe that blockchain solutions should be accessible to all regardless of their choice protocol.

The ERC20 Cardano Converter tool is a bridge that allows projects in Ethereum to deploy solutions on Cardano while using the same ERC-20 tokens. On Cardano, Ethereum dApps will access better scaling and dApp users enjoy relatively low on-chain transaction fees.

Why Ethereum and ERC-20 Tokens?

The decision to, in the meantime, support the conversion of ERC-20 tokens to Cardano native tokens is by design. Ethereum is a fully functional, widely adopted, decentralized, and has a vibrant dApp ecosystem. At the same time, the ERC-20 standard on Ethereum is well-designed. It is also the world’s most popular standard for minting fungible tokens. These tokens can be swapped for another and bear the same properties. Most importantly, it is effortless to release. As of early Q2 2022, over 516k ERC-20 tokens served as payment and transaction units, security assets, rewards, powering investment mechanisms, and more.

Challenges in Ethereum and What Cardano Brings to the Table

However, scaling challenges in Ethereum remain a huge impediment to adoption as Gas rises to untenable levels. Although Ethereum developers’ primary objective is to create scaling solutions, even changing their roadmap to incorporate their quest for scalability, this resolution might take months. Therefore, by eventually launching an ERC20 Converter, IOG and its development partners are delivering an irresistible proposal highlighting the features of Cardano like high processing speeds and negligible low fees that can be leveraged by projects on Ethereum searching for fitting alternatives.

At the height of Cardano is the lightweight Ouroboros proof-of-stake consensus mechanism designed to scale from the onset. Moreover, the UTxO model adopted by Cardano, inherited from Bitcoin, doesn’t demand smart contract execution costs since there is a default native token functionality. In the Cardano setup, the primary ledger tracks all transactions — relieving smart contracts serving that demanding role in account-based models.

The Rise of Cardano Native Tokens

Following the activation of the Alonzo Upgrade, Cardano supports smart contracts. Also, users are free to create native tokens in a relatively risk-free manner. There are over 40,000 unique native tokens deployed in a scalable, low-fee, and decentralized blockchain ledger guided by peer review.

The ERC-20 to Cardano Converter tool would allow interested organizations and projects to migrate their tokens to Cardano quickly — and vice versa.

Once migrated, these tokens are converted into Cardano native tokens inheriting all value and functionality from Ethereum. Because of the backed-in two-way interoperability, users can also move their tokens to Ethereum by burning a similar amount on Cardano.

ERC-20 Cardano Converter Tool in Test Network

As the Converter tool is optimized and its infrastructure configured, IOG is presently working with Singularity — an Ethereum-based project — to create a permissioned ERC-20 to Cardano Converter in the Ethereum Kovan testnet.

Users can connect using their Daedalus or Yoroi and MetaMask non-custodial wallets to receive native and ERC-20 tokens. At the same time, following the activation of Plutus Smart Contracts at the end of Goguen, IOG plans to support more partners. Their eventual plan is to promote effective and secure interoperability, laying out the ERC-20 Converter tool as a reliable bridge.

Genius X Projects to Massively Benefit

Cardano is a high-performance blockchain whose creators are already working on building and collaborating on useful bridges with other similarly high power blockchains. Therefore, the successful launch of the ERC-20 Converter tool will be a massive milestone for the proof-of-stake network. It will make Cardano more liquid as more projects would easily migrate from competing blockchains and deploy in the network without the need for technical coding skills.

The Converter tool will introduce millions of people to Cardano-based projects, including those finding business development and technical support through the Genius X accelerator program. Besides, converted ERC-20 tokens can be traded for other native tokens cheaply on secure swapping platforms like Genius DEX.