One smart contract platform to rule them all
Welcome to the smart contract wars.
Ethereum 2.0 (ETH) Vs. Polkadot (DOT) Vs. Cardano (ADA)
Three, count em, three world-changing cryptocurrencies. However, only one can lead the charge on smart contracts.
Who’s your pick?
Ethereum is galaxies away in terms of ecosystem and market cap, but the two “Ethereum killers,” being Polkadot and Cardano are hot on its tail.
On paper, all three projects do the same thing. They want to create programmable money and host a smart contract platform in which developers can easily build decentralized apps on. The specifics of accomplishing that goal are where everyone disagrees.
That’s why I’m here to find out which project has the greatest chance at succeeding between Cardano and Polkadot.
Let’s take a look at these nasty “Ethereum killers.”
Round 1: The founders
The creator of Cardano is Charles Hoskinson. He’s a mathematician, tech entrepreneur, and one of the co-founders of Ethereum. Charles was fired from Ethereum quite early into its development — and quite shamefully if I might add.
Charles is also the founder of Input-Output Hong Kong [IOHK], a for-profit software company that designs, builds, and maintains Cardano.
Since the beginning Charles always had a stark rivalry against another Ethereum co-founder, Dr. Gavin Wood, the founder of Polkadot.
In Matthew Leising’s book on Ethereum history “Out of the Ether,” it’s explained that Gavin never saw see eye to eye with Charles. They hated each other due to a difference in Ethereum’s core philosophy.
Gavin is a computer scientist. He invented the Solidity coding language, architected the first functional Ethereum blockchain, and wrote one of the most influential programming manifestos — the yellow paper.
Dr. Gavin believed the business side of Ethereum should take a backseat to the actual development. Charles clearly had other plans.
Like a bad rap rivalry, however, these two have squashed their beef. But their core philosophies continue to keep them at ends.
Round 2: What’s under the hood
Cardano and Polkadot both aim to accomplish the same goal but in radically different ways.
Both are Proof-of-Stake blockchains, but Polkadot is at the forefront of crypto technology. Polkadot is a network of multiple blockchains and brings all of them into one network.
The main blockchain is called a relay chain and user-created ones are called parachains. As per Kraken’s definition —
Parachains can be customized for any number of uses and feed into the main blockchain, so that parachain transactions benefit from the same security of the main chain.
For instance, one parachain could act as a decentralized finance hub, another as a place to transact Stablecoins, and even one to integrate an eco-friendly energy network. The possibilities are endless.
Everything that ends up on Polkadot first goes throughKusama(KSM), which is Polkadot’s pre-production platform. Kusama allows developers to experiment with their applications before minting them on the relay chain.
Kusama’s motto: ‘A risk-taking, fast-moving ‘canary in the coal mine for its cousin Polkadot.’
Gavin has noted that Polkadot will one day be scalable enough to handle one million transactions per second using parachains and sharding.
Fascinating!
So how does Cardano stack up?
Cardano is the academic blockchain. It doesn’t try to reinvent the wheel, it is the wheel. Cardano has gone through years of peer-reviewed research in order to perfect traditional blockchain mechanics.
There are two layers on Cardano: the settlement layer, which keeps track of token balances and transfers, and the computation layer which runs all the smart contracts.
The backbone of Cardano is Ouroboros. It’s the firstprovably secure proof-of-stake protocol that allows the network to process a few hundred transactions per second. Very neat.
“Ouroboros exists to define the parameters of the new world: a protocol more secure, scalable, and energy-efficient than anything that has come before.”
Cardano’s greatest achievement is its interoperability. Earlier this year ADA developers announced a new ERC20 converter that bridges Ethereum over to Cardano. This makes Cardano an excellent scaling solution for Ethereum.
Who would’ve thunk?
Lastly, Cardano will use Hydra as a second layer scaling solution to reach around 1,000 transactions per second. And if 1,000 stake pools are running at one time Cardano could reach a maximum of one million transactions per second.
Brilliant!
Round 3: Community
Polkadot’s Achilles heel is community engagement.
Charles spends a lot more time engaging with the Cardano community than Gavin does with Polkadots’. This is a reflection of their personalities. Charles, the savvy business entrepreneur, and Gavin the tech-driven engineer.
It’s apples and oranges. Chalk and cheese [mm, cheese]
Polkadot’s only been around since 2020, while Cardano was released in 2015. So Polkadot’s lack of community support may be for this very reason. However, the dichotomy between their respective subreddits is shocking, to say the least —
r/Cardano: 481,000
r/Dot: 25,000
If there’s a clear advantage that Cardano has over Polkadot — this is it.
Round 4: Ecosystems
There are over 350 projects built on the Polkadot network. The most popular are Kusama, Moonbeam (DOT’s proposed smart contract bridge between Ethereum and Polkadot), and Polkastarter.
Cardano on the other hand has, well, zero projects. I wish I was joking.
If there’s a clear advantage that Polkadot had over Cardano — this is it.
Cardano has many projects in the works but the network isn’t expected to implement smart contracts until August (aSsUmInG tHeRe aRe No MoRe DeLaYs In ThEiR rOaD mAp).
This is a big problem for Cardano. They had five years over Polkadot and still lost the first-movers advantage in the smart contract war. Major bummer.
There are some who argue that the speed of releasing projects won’t matter in the long run. I say Phooey! In my opinion it’s a massive disadvantage especially if Cardano can’t catch up.
Final Round: Tokenomics
First a bit of monetary policy for the nerds out there —
Polkadot
-Native currency: DOT ($24.02)
-Total initial supply: 10 million
-Supply in circulation: 908 million
-Total planned inflation: Unlimited
-Maximum token supply: Unlimited.
-Inflation rate: Based on the network use and reaches a maximum of 10% (currently at 10%)
Cardano
-Native currency: ADA ($1.71)
-Supply in circulation: 31 billion.
-Total expected inflation: 14 billion.
-Maximum token supply: 45 billion.
-Inflation rate: Every 4 to 5 years the reserves (14 billion) will be halved. Cardano is deflationary and has a halving cycle just like Bitcoin.
Because DOT is an inflationary currency you have to stake tokens or risk losing 10% of your DOT’s value per year. It’s an absurd inflation rate to be honest. You have no choice but to stake in this network.
DOT validators earn between 10 to 15 % interest on their tokens per year. It barely squeezes out inflation. However, there is a minimum amount of DOT required to earn rewards.
Cardano’s staking rewards are less substantial averaging out to 7.31% APY. There is no minimum amount needed for staking ADA. As little as two ADA will reap rewards.
More than 70% of the Cardano network stakes tokens. It’s the most staked blockchain on the market.
Earning rewards from staking both networks can be done directly through the Guarda and Atomic wallets respectively.
The Winner (Technical Knockout)
Phew, this is rough.
Let’s tally up the results, shall we?
1.The Founders: While I’m more impressed with Gavin Wood’s technical mastery, it’s Charles Hoskinson’s showmanship that has pioneered the Cardano community. Winner: Cardano
2. Specs: Cardano has the potential to be the most interoperable and efficient blockchain in existence. But it doesn’t have anything to prove for it. Polkadot, on the other hand, launched one of the best smart contract ecosystems in under a year. Winner: Polka Polka
3. Community: Cardano is the 7th most searched cryptocurrency in the last week. It’s always in the top ten. Where’s Polkadot on this list? Number 16… Additionally, Charles Hoskinson’s dominant YouTube presence makes ADA much more popular than DOT. Winner: Cardano
4. Ecosystem: Maybe one day we’ll all laugh over this strange period where Cardano had zero projects. We’ll say, “wow that was a weird time .” But right now Cardano is in the Twilight Zone. It’s everything and nothing at the same time. Winner: Polkadot
5. Tokenomics: So it comes down to this. Which token is superior? In all honesty — it’s Cardano. Despite Polkadot’s high-yielding stake, it equals out to around the same APY as Cardano considering inflation. Cardano also has much more upside as it’s accomplished the fifth overall market cap without any dApp ecosystem at all. Winner winner chicken dinner: Cardano
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