Cardano announces fresh upgrades as on-chain DeFi TVL crosses $100 million
These upgrades aim to improve cross-chain features on the Cardano blockchain.
10 FEB 2023, 3 min read
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In one of the latest developments from one of the most up-and-coming blockchain networks in the industry - Cardano's IOHK has announced a series of enhancements to the cross-chain functionality for decentralized finance (DeFi) applications building on the network.

Founded back in 2015 by Charles Hoskinson and Jeremy Wood, IOHK is the blockchain infrastructure research and engineering company behind the Cardano blockchain and smart contract project. According to their website, it is a decentralized organization that works on the principles of academic rigor and evidence-based software development.

According to a tweet from Cardano code maintainer, IOG - the proposal was submitted on Wednesday, 8 February 2023 and will take effect on 11 February at 12 AM, UTC. The upgrade proposal will be initially executed on a virtual sandbox that mimics the real-world performance before it is eventually released on the mainnet.

This upgrade is expected to bring about enhanced cryptographic features to Cardano while also improving its cross-chain decentralized application (dApp) development on Plutus - which is the smart contract platform of the Cardano network.

But what are cross-chain bridges?

Cross-chain bridges are essentially software applications on a blockchain that enable transactions of data or information to occur between various blockchains networks. This is a crucial feature for those developers building on the network to build dApps that can connect Cardano to other blockchains. This also has the added benefit of decentralized finance (DeFi) apps built on Cardano to be accessed easily by users from other blockchains thus bringing about more interoperability.

The announcement of this upgrade comes as Cardano's DeFi total-value-locked (TVL) crossed a seven-month high of $108 million earlier this week. It has since then fallen slightly and is currently at about $93 million as of writing this article, according to data sourced from DefiLlama.

Cardano DeFi Total-Value-Locked (TVL) | Source: DefiLlama

Cardano's decentralized finance capabilities have been exploding of late with the launch of its overcollateralized stablecoin, called djed which was launched late last month. According to a report by CoinDesk, djed is backed by other tokens and requires anywhere between 400% to as much as 800% in collateral before the token is issued to any user.

Djed is a Cardano-backed and community-driven algorithmic stablecoin which is also a product of Coti - a DeFi solution developer on the Cardano blockchain. Algorithmic stablecoins have not had a very positive history in the market and the wounds of the catastrophic Terra LUNA crash post the UST de-pegging fiasco from May 2022 still haven't healed.

Read: Cardano DEX floats governance proposal for the first time ever!

Thus overall, these developments to the Cardano ecosystem will have very positive effects in the long term, especially considering the strong peer-review-based systems and processes it was built on. Cardano has been touted as one of the most promising 'Ethereum killers' for quite some time now and with such focus on interoperability and high quality, purely decentralized algorithmic stablecoin mechanism underway - things look pretty bright for its future.

Despite all these positive developments, Cardano has been one of the poorer performers in terms of price appreciation amongst the top crypto assets by market capitalization. Cardano's native token, ADA price is down over 88% from its all-time-highs back in September 2021 - indicative of how bad the bear run has been on the token.

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