CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

Cardano (ADA) Vasil hard fork: Worth the wait

By Monte Stewart


Updated

Fork in the road
Cardano investors hope the Vasil hard fork will boost the value of the ADA cryptocurrency. - Photo: Getty Images

Cardano’s leaders and supporters were disappointed this week as the blockchain’s Vasil hard fork was postponed, but they delivered a clear, albeit subtle message: It will be worth the wait.

“We recognize that this news will be disappointing to some,” wrote Nigel Hemsley, head of delivery and projects for Input Output, the company behind Cardano’s blockchain and cryptocurrency (ADA), in a blog post. “However, we are taking an abundance of caution to ensure that we do this deployment correctly.”

ADA to USD

What is a hard fork?

The highly anticipated hard fork was originally slated to be finalized 29 June but is now expected to be complete by the end of July.

Which begs the question, what is a hard fork?

In simple terms, a hard fork is a blockchain network upgrade. The Vasil hard fork, which derives its name from late Bulgarian mathematician and Cardano ambassador Vasil Dabov, is designed to make the network perform faster and better while helping it to scale up and ultimately increase ADA’s price.

What is your sentiment on ADA/USD?

0.25771
Bullish
or
Bearish
Vote to see Traders sentiment!

ETH to USD

Upgraded blockchain to come

When a blockchain hard forks, a new upgraded blockchain splits from its predecessor, as Bitcoin (BTC) split into Bitcoin Cash (BCH) and Ethereum (ETH) gave birth to Ethereum Classic (ETC).

“Blockchain networks work on the basis that network nodes follow a particular protocol,” Andreas Park, a University of Toronto finance professor who specializes in blockchains and cryptocurrency, told Capital.com.

Nodes need to agree

“A hard fork is a situation where nodes switch the protocol that they use so that block X uses the old protocol and block X+1 uses the new one. Co-ordinating these changes is difficult and requires that the nodes actually agree. Examples for changes are how much data a block can contain, what codes can be run, the consensus protocol, and so on.”

According to Input Output CEO and Cardano founder Charles Hoskinson, the Vasil hard fork will provide a “massive performance improvement to Cardano and its smart contract capabilities.” Smart contracts enable transactions to be agreed upon and completed automatically behind the scenes.

Cardano’s hard fork developers and other blockchain experts have suggested that Vasil will set itself apart from others because it will allow for the use of references scripts that accelerate and increase smart contracts.

ETH/USD

1,642.55 Price
-0.970% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 5.40

DOGE/USD

0.06 Price
-0.970% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012166

BTC/USD

27,446.10 Price
+0.060% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 85.00

XRP/USD

0.54 Price
+3.450% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01192

“Running a smart contract means running a piece of code,” said Park. “You have to pay a fee for each operation in the code and there are limits for how many operations can be put into a single block,” said Park. “Moreover, you need to include the code in a transaction each time you use it, and there is a limit for that information, too.

Photo of Andreas ParkAndreas Park, University of Toronto finance professor (Photo courtesy of Andreas Park)

‘Better way of doing things’

“A hard fork is simply a switch to a better way of doing things,” continued Park. “Usually, it’s a positive development. We’re just too used to a big boss [or] government dictating how things are done, whereas in the blockchain world, it’s always a communal effort and requires people to be on the same page.”

 

 

More tests done

Input Output CEO Hoskinson said in a video on his Twitter page, also posted on YouTube, that “the stakes have never been higher” for Cardano and ADA, apparently alluding to recent troubles being experienced by crypto lender Celsius Network and hedge fund Three Arrows, who were both affected by the crashes of the original luna (since replaced by LUNA2) and its sister token terra, a stablecoin that became depegged from the US dollar in May.

The Input Output and Cardano teams, known for proceeding carefully at the best of times, conducted more tests in wake of the LUNA and UST crashes, which have caused BTC and altcoin prices to plunge further from their November 2021 all time highs.

BTC to US dollar

Hemsley said in his blog post that seven bugs in the system still need to be fixed and the work, being completed by teams from Input Output and the foundation that runs the blockchain and its coin, could not be completed in time to complete the hard fork.

“The work on Vasil has been the most complex program of development and integration to date, from several angles,” he wrote. “It’s a challenging process that requires not only significant work from core teams, but also close co-ordination across the ecosystem.”

A test network, or testnet, will continue to operate as the kinks are worked out of the system and experts strive to prove that the improvements were worth the wait.

Markets in this article

ADA/USD
Cardano / USD
0.25771 USD
-0.00549 -2.110%
BCH/USD
Bitcoin Cash / USD
230.10 USD
-3.15 -1.360%
BTC/USD
Bitcoin / USD
27446.10 USD
17.5 +0.060%
ETH/USD
Ethereum / USD
1642.55 USD
-16.05 -0.970%
ETC/USD
ETC/USD
15.966 USD
-0.428 -2.690%

Rate this article

Related reading

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Still looking for a broker you can trust?

Join the 555.000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading