Smart contracts arrive through the KEVM devnet—what does this mean for Cardano?

Smart contracts arrive through the KEVM devnet—what does this mean for Cardano?

Watch the demo of the KEVM devnet on IOHK’s monthly product update from 17 December above

On 17 December 2020, our engineering partner, IOHK, announced that smart contracts would soon be available to deploy on Cardano through the launch of the KEVM devnet.

Those of you who have been in the Cardano ecosystem for a while may remember the KEVM testnet being operational for developers to explore and try out Solidity smart contract features.

The KEVM testnet, and the recently launched devnet, uses a version of the Ethereum Virtual Machine (EVM) verified by the K-framework—allowing the formal verification of smart contracts.

However, the release of the KEVM devnet provides a fundamentally different function to its earlier testnet environment. It also represents a huge potential for the deployment of smart contracts on Cardano.

In this short post, we will discover what smart contracts and devnets mean to developers, and explore what this means for the wider Cardano ecosystem.

What is a smart contract?

A smart contract is a program or code that is designed to automatically execute a transaction between two or more parties. Smart contracts are usually written and deployed on a blockchain protocol, but they were first proposed by Nick Szabo in the early 1990s.

Through smart contracts, participants in a pseudo-anonymous or decentralized network can transact with one another in a trusted way, relying on the smart contract to execute the transaction’s terms. This is often referred to as a ‘trustless’ transaction, as the transacting parties are not required to trust one another in order for the transaction to function properly.

Smart contracts also power decentralized applications (DApps). Behind every DApp is a set of smart contracts that enable users to interact with the application. This could be as simple as sending funds to a contract address in return for tokens, or as we have seen recently in decentralized finance, more complex contracts such as generating APY from loaning out digital assets.

Smart contracts require verified external data in order to function correctly, a process made possible through oracle providers. As announced on 17 December 2020, Wolfram Alpha will be providing the initial oracle services for smart contracts on the Cardano blockchain. This sets the stage for a fully-functional smart contract environment and the foundations for a flourishing ecosystem of DApps in 2021.

Devnet vs. testnet—what is the difference?

A testnet environment allows the exploration of features in a secure development environment, where developers building on a blockchain can first test the limits and capabilities of their programs.

However, testnets do not usually allow developers to implement and use the programs or contracts they write in a fully operational environment once the testnet concludes. Likewise, testnets do not usually contain all the tools and features that will make it into the final development environment.

A devnet, on the other hand, is a near-complete development kit for programmers to write code and contracts that are fully available once the mainnet goes live. In other words, it is a functional pre-release development environment for building the first applications for the Cardano blockchain.

IOHK likens this to the development procedure for gaming consoles. Launching a new generation of consoles with no new games titles would be counterproductive. Instead, console manufacturers provide a secure development environment for game developers, allowing them to build games that are ready for the console’s initial launch.

On Cardano, this means that developers can now begin writing smart contracts and DApps for eventual use on the Cardano mainnet. This represents the first time that DApps and smart contracts can be written on Cardano, one of the most crucial aspects of blockchain layer-two functionality.

What does this mean for Cardano?

Through the KEVM devnet, over 140,000 smart contracts currently deployed on the Ethereum blockchain will become compatible and deployable on Cardano. Ethereum developers can write DApps in Solidity—Ethereum’s most popular smart contract language—Glow, or EVM languages, and deploy these contracts on Cardano.

Lower fees and higher transaction throughput on Cardano are expected to provide an attractive incentive for DApp and smart contract developers to move to Cardano, and KEVM will provide the infrastructure to do so with ease.

The KEVM devnet will be launched as a standalone network. Upon mainnet launch, smart contracts written on the devnet will be connected to the mainnet via sidechains. This is expected to take place in the first quarter of 2021. KEVM will be the first of three new devnet environments for Cardano, the others being Glow and IELE.

The Cardano Foundation looks forward to seeing what solutions are built-on and migrated-to Cardano during 2021, and we are prepared for our ecosystem to welcome a cascade of new users.

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