Later today, we'll deploy Plutus smart contract capabilities onto the Cardano mainnet via a hard fork combinator (HFC) protocol upgrade event.

The Alonzo upgrade will bring highly anticipated capabilities to Cardano through the integration of Plutus scripts onto the blockchain. These will allow the implementation of smart contracts on Cardano, enabling a host of new use cases for decentralized applications (DApps) for the very first time.

It’s only just the beginning. But this is still a moment for celebration. As a community, we have been on an incredible journey together. Rightly, we should allow ourselves to acknowledge the tremendous efforts made by so many to get here. This will also be a time for reflection on the challenges we've collectively overcome.

While we might allow ourselves some brief downtime, this is no moment to rest up. And there is certainly no room for hubris. This is where the mission truly begins as we – the whole community – start delivering on the vision we have all been working towards for so long. Building a decentralized system that extends economic identity and opportunity to everyone, everywhere.

The road to here

While many years of research and development have prepared the ground, it was the Byron reboot in March 2020 that truly laid the foundations for the network we have today, by providing a robust and scalable code base on which to build. In July the same year, the Shelley upgrade shifted Cardano from a federated model towards a decentralized one.

Since the end of March 2021, when we adjusted the network decentralization parameter to D=0, every block has been produced by a decentralized network from a community of 2,868 stake pools.

It’s a remarkable staking ecosystem that continues to grow rapidly. According to statistics from Cardano data aggregation tool Pooltool, the number of ada staking wallets today stands at 825,755. This represents an increase of 35%+ since June. At the time of writing, the total ada delegated to stake pools is valued at $ 59.86 billion, accounting for 71.4% percent of total ada supply ($ 83.9b).

March’s Mary upgrade created a multi-asset network and introduced native tokens. As well as providing an alternative to the ERC20-type model, Mary released a Cambrian Explosion of creativity. With low minting and transaction fees and, uniquely, no need for smart contracts for Cardano NFTs, we have seen the blooming of an incredible NFT ecosystem. According to data from pool.pm (powered by Smaug pool), Cardano has seen 780,436 tokens minted to date and 19,419 policies. All without the need for smart contracts.

Enter Alonzo

The Alonzo upgrade (named after the pioneering American mathematician Alonzo Church), will build on this success. Deployed using the same HFC technology used in previous upgrades, this will mark the beginning of a fresh period of rapid growth. By allowing Plutus scripts to be written and executed on-chain, we’ll have the backbone for a new decentralized application platform, enabling numerous DApp and decentralized finance (DeFi) use cases – from simple swap type apps to decentralized exchanges (DEXs), and more complex computational programs such as Oracles and crypto-backed algorithmic stablecoins.

So, we have one of the most decentralized, sustainable, robust, and advanced blockchain platforms in the world, run by a skilled community of stake pool operators (SPOs). We enjoy an informed and passionate community of delegators. We have a thriving NFT ecosystem, attracted by the ease and low-cost of minting. Oh, and a roadmap for future governance through Voltaire and ultimate scalability through Basho and Hydra scaling. The future is bright and stretches far; we’ll continue to travel the long road together.

The birth of a new developer ecosystem

All the core building blocks are in place. Platform. Vision. Mission. Community. It is still very early days for smart contracts and DeFi, yet we have made great progress already.

Thousands of developers have been taking part in the Plutus Pioneers course, learning the fundamentals of Cardano’s native development framework. Scores of projects have already started developing in Plutus and are at various stages of expertise and readiness. Hundreds of projects have been actively working on the various Cardano testnets and privately-hosted solutions. Some 150 projects are developing their ideas via Cardano’s Project Catalyst innovation program, the world’s largest decentralized innovation fund. In the latest round, 800 – yes, 800 – projects applied for $4m-worth of funding. With a treasury now worth well north of $1bn at today’s values, and 33k+ members, the future for building on Cardano couldn’t be brighter.

For a snapshot of just how many projects and organizations comprise the ecosystem, visit our Essential Cardano repo. Or check out the various excellent ecosystem maps (these are representative, though none are comprehensive) out there like those from the Cardians (see Figure 1). These don’t represent what projects will be visible right away. But they offer a beautiful vista.

Figure 1. Ecosystem map by @Cardians_

We look forward to seeing these projects evolve as they head towards deployment. Some are close to the launch pad, others further off. Following the release of our first full public testnet earlier this month, and now the mainnet, we expect to see many start to ramp up their development activity.

We are still early

Let us be clear. There will be bumps in the road. Early user experiences might not be perfect. Some early DApps will have issues. We'll see some great development teams and some poor ones. This is a permissionless, decentralized blockchain, so this is inevitable. And a few DApps may prove insecure. Cardano’s secure layer 1 platform offers robustness and high assurance – and Plutus is designed to minimize the potential for exploits. But poor coding practice can always introduce risks for DApp users. Inevitably too, we can expect bad actors looking to take advantage via hacks, exploits, and the likes.

As a community, we need to be vigilant as our ecosystem matures. In fact, we believe that to mature across the industry as a whole, certification needs to be taken more seriously. At the summit, we’ll announce plans on how – along with a number of strategic partners – we’ll be supporting the creation of new standards and solutions.

Do Your Own Research

As ever, we encourage everyone to do your own research (DYOR). Look to your fellow community members for ‘crowdsourced due diligence’ and provide your own contributions. Look for projects with a positive history of open and transparent communication, properly maintained social channels/websites, and technical track records. Be sensible out there, especially in these early days. Alongside confidence in DApp security and project intent, DApp discovery will also be key to the healthy growth of the Cardano ecosystem. So expect to hear more on that at the summit, too.

The summit will also be a time for celebration, although there will be those who will seek to sour this. While our community is always open to being challenged in good faith, we have grown too used to Twitter’s and Reddit’s fear, uncertainty, and doubt (FUD) – from the biased and the willfully ignorant. Every project receives its share of this toxicity, and a greater degree is inevitable around major releases.

This is a disappointing element of our immature industry. We need to do better if we want to accelerate wider adoption. The FUD has been particularly virulent this past week. For me, it's a daily part of the job. Fortunately, most of my colleagues focus on building and don't concern themselves too much with CryptoTwitter™.

We shall see plenty more FUD and nonsense over the weeks ahead. Things will likely get uglier before they get better. Whatever. This will only strengthen our resolve to prove the naysayers wrong. We also have a vibrant and passionate community that never fails to support the project and respond with facts and courtesy. That continues to make everyone working on Cardano exceptionally proud. Thank you.

We are still early

Let’s remain steadfast through the storm. And focus instead on a bright horizon. We expect to see the first simple smart contract scripts deployed on Cardano within hours of the HFC event. It will take a while longer for more sophisticated DApps to start rolling out via the public testnet. With hundreds of projects building behind the scenes, we expect to see projects deploy through September and October, and accelerate through Q4. Especially with launchpads, tools and frameworks, including the Plutus Application Backend (PAB), and community-created APIs becoming available.

There are high expectations resting on this upgrade. Some unreasonably so. Cardano watchers may be expecting a sophisticated ecosystem of consumer-ready DApps available immediately after the upgrade. Expectations need to be managed here. We should remember that another well-known blockchain project which launched in July 2015 had to wait over two years before its first DApp (something to do with cats?) gained real user traction.

Steady iteration and improvements

Over the coming months, we’ll continue our cadence of fortnightly releases of new code, regular maintenance upgrades, and major HFC events each quarter. We shall continue to tune and optimize the platform, adjust performance, and refine pricing parameters as we track and monitor usage patterns. Only real usage will reveal how we need to adjust our flexible and scalable platform over the months of growth ahead. We shall also be looking to the growing developer community and the Cardano Improvement Proposal (CIP) process to bring further capability based on key requirements and needs.

The Alonzo HFC event will deploy Plutus 1.0, the core platform which itself will continue to evolve and bring more functionality over the coming months. Plutus is our native language, but of course, it is only the beginning here too. New bridges, sidechains, and other layer 2 solutions will bring in fresh options and an ever wider developer base. Future upgrades stemming from the work being done on Hydra will add further capability. Research papers like stablecoins, Babel coins, and stable fees will also in time start moving toward the prototype phase, bringing further innovation to the longer-term roadmap.

So, while we remain focused on continuing to research and develop longer-term utility for the platform, the ecosystem will evolve fast over the coming months. It's going to be quite a ride, with a huge amount of activity within the community.

Exciting times ahead

The Alonzo upgrade is a transformational network upgrade that will catalyze a blossoming ecosystem of developers, creators, and innovators. Later this month, we’ll have the Cardano summit. This week, we finalized the sessions. With over 100 sessions and more than 40 hours of content spread over multiple tracks across two full days, this will be the most significant event in Cardano’s history. It will be a celebration across virtual worlds and real-life meetups, a showcase of where we are today, and a forum to talk about where we’re heading. A reflection of a budding ecosystem that, while young, has always shown great maturity of purpose. And a platform for exciting new announcements.

So as we pass the epoch boundary today, let's take that moment. We can allow ourselves a celebratory whisky or two (even if it's just a cheeky splash in our morning coffee for our friends in Asia and the Southern hemisphere).

Let’s be proud of what we have achieved. But this is where the real work begins.

Let’s go.

Today at 21:44:51 GMT, block production on Cardano will be fully decentralized. That is a watershed. From a federated network of seven core nodes run by IOHK, Emurgo, and the Cardano Foundation, we’ll emerge into a decentralized landscape where the stake pool operator (SPOs) community will produce 100% of blocks.

Cardano is a proof-of-stake blockchain platform, founded on peer-reviewed research and delivered through evidence-based software development processes, by a team of world-leading researchers and engineers. From this technocratic core, Cardano exists to steadily redistribute power to the edges – to a community of individuals. And to empower them as an enabling force for change and progress.

Our SPO community has been instrumental in bringing Cardano to this point. When d, the decentralization parameter, reaches zero, SPOs will become responsible for creating all blocks on Cardano.

Why decentralization?

In everyday terms, decentralization is the delegation of power from a central authority to a wider group of bodies. But that definition only scrapes the surface in the context of cryptocurrencies and blockchain.

Cardano's technical journey to full decentralization continues through phased developments that include degrees of block-production from SPOs, peer-to-peer (P2P) network discovery, and ‘gossip’ with peers exchanging information among themselves. It involves the deployment of advanced community-led governance and decision-making frameworks, culminating in fully decentralized software and protocol updates. Ultimately, it will result in the creation of a platform wholly and democratically operated and controlled through a global community of SPOs, developers and ada holders.

Decentralization is a core value and driver for Cardano, and we are far from alone in this. The mainstream financial world has recognised that blockchain and the decentralized finance (DeFi) technology it enables has the potential to spawn a new financial system as revolutionary as the internet itself. And that is just part of a trend towards decentralization. Open protocols between renters and providers of data storage that anyone can use have the potential to disrupt the dominant centralized cloud server providers such as Amazon and Microsoft, and there are similar trends affecting video and communication networks and gaming. Cryptocurrencies first brought people into the blockchain world and now the buzz around non-fungible tokens (NFTs) is encouraging them to interact with blockchain in a new, fun way. These trends are introducing blockchain to the mass market.

Power to the edges

Centralization has shifted the balance of power, from the people to corporations such as Facebook and Google, creating a virtual information monopoly. Because of their unchallenged market positions, centralized authorities enjoy data hegemony over their consumers.

Decentralization is the antidote to this concentration of power and the risks that it brings. Decentralization empowers the individual to make choices and decisions, it returns ownership of personal information to where it belongs, it pushes power to the edges and enables every participant in the network (or ada holder) to have a stake.

There are three pillars to Cardano's decentralization: block production, networking, and governance. These are intrinsically linked to one another, and work synergistically to create a unified outcome: full decentralization, which lies at their confluence.

Pillar one: block production

Every blockchain relies on the addition of new blocks to grow and thrive. With the Byron era deployment, core nodes – managed by IOHK, Emurgo, and the Cardano Foundation – were wholly responsible for creating blocks and maintaining the network. The advent of Shelley and the Incentivized Testnet in 2019 served as testing ground for decentralized block production. The results demonstrated the viability of such an initiative. In other words, the Incentivized Testnet experiment proved that Cardano could be reliably sustained by a network of community-run stake pools. As of epoch 170 on June 3, 2020, there were 1,299 registered stake pools, 413 of which were creating blocks.

Today, we now have about 2,300 pools, with a healthy proportion creating blocks and rewarding delegates. Some are controlled by exchanges, others by single-pool community operators. All bring value to the network. The former through their ability to bring new ada holders into the ecosystem, the latter through their contribution to continuing decentralization and encouraging grassroots engagement. We are committed to encouraging decentralization, and adjustments this year to parameters such as k (maximum pool size) and pledge along with our community delegation strategy – and more on that later this week – will continue to propel this agenda forward.

Pillar two: networking

The second pillar of Cardano's decentralization is the implementation of peer-to-peer (P2P) networking, which has also been tested with Shelley. The aim here is to link together geographically distributed pools to provide a secure and robust blockchain platform.

On mainnet, this feature will use a set of mini-protocols and a classification of cold, warm, and hot peers so a given node can make the best decision when selecting connections. From a networking perspective, we are in a hybrid phase where manual processes are required from SPOs to maintain network connections. When d=0, all the core nodes will be retired as SPOs take over block production. IOHK will continue to maintain relays but, increasingly, the SPO network will also take on this role. To dig deeper into this, check out this segment of March’s Cardano360 show, where Cardano chief architect Duncan Coutts laid out the P2P roadmap.

Pillar three: governance

The Goguen roll-out has already introduced transaction metadata and native tokens to Cardano. Arguably, this has been the most apparent manifestation of growth and progress for Cardano since the Shelley launch.

Yet, at the same time, we have also seen the rise of something even more powerful: an engaged community of builders, creators, and entrepreneurs within Project Catalyst. At the time of writing, the Catalyst community includes 17,000+ worldwide members. This pool of decentralized talent includes entrepreneurs, experts, and specialists across many areas, and provides a vast reservoir of ingenuity to ensure the best and brightest ideas get the funding they deserve.

A layer of solid governance supports the very core of what Cardano is trying to ultimately achieve: a blockchain where a community of stakeholders makes practical decisions about the chain’s protocol and evolution. Catalyst is the precursor to Voltaire, the development theme that will introduce the third and final level of decentralization through the integration of governance and on-chain decision-making/voting.

Voltaire will introduce:

• Access to funding via a decentralized treasury (worth some $400m at the current ada price) within a governance framework where the community will have the power, through their ada stake, to influence Cardano's future direction
• Decentralized decision-making on enhancements, network improvements, and parameter updates
• Fully decentralized software updates: the process enabling decentralized, open participation for fair voting on decisions about system and protocol advancements

Conclusion: the fall of centralization

Decentralized block production – done. P2P networking – rolling out from April. Governance? Project Catalyst is on a roll and there is much more to come.

From a federated chain with centralized block production, to a chain with blocks wholly minted by the community. We are well on our way. When we have completed building all three pillars, we shall have created something truly unique. A network that is robust and resilient, yet flexible and adaptable to future growth. A platform that serves its users today, while empowering them to build fresh value and functionality for tomorrow. All within a democratic framework where the community makes the calls. True decentralization, standing atop those three pillars.

While their impact on Roman emperor Julius Caesar was less than favorable, the Ides of March have proved propitious for Cardano, as ada has this week been listed on Coinbase Pro and also added to the prestigious Bloomberg Terminal. These are both major developments, reinforcing Cardano's position in the cryptocurrency landscape. One brings ada to an entirely new customer base, while the other offers a whole new level of visibility for Cardano to the global finance industry. 

Coinbase – coming of age?

The Coinbase listing marks something of a coming of age for Cardano, with the potential to bring millions of new ada holders to the ecosystem at an exciting time. Coinbase Pro is designed for individual traders, providing direct access to Coinbase Markets, the company’s ‘single source of liquidity’, as an upgrade path for consumer Coinbase customers.

From the early success of the incentivized testnet in 2019, to the introduction of staking last summer, the momentum has been steadily building for Cardano. Now, as we continue our Goguen rollout, decentralization continues apace, with full responsibility for block production being assigned to stake pools at the end of this month, on D=0 day. Arguably 100x times more decentralized than the Bitcoin blockchain and, with 2,000+ registered stake pools, we can lay claim to being the most successful, most distributed Proof of Stake network in the world.

The timing is good. After years of research and development effort, the wider industry is now starting to properly recognize the potential that the incredible Cardano community has long believed in. Our network of stake pool operators has helped us create a blockchain that is provably secure, environmentally sustainable and scalable to the needs of a new generation of services.

The Goguen rollout is bringing a new level of utility to the platform – from metadata and native tokens, NFTs, DeFi and smart contracts. Our open innovation funding platform for development on Cardano, Project Catalyst, has already funded a number of proposals to enrich the Cardano ecosystem. Millions more dollars of funding will be made available for community innovation this year, drawn from a total Cardano treasury worth $400M+ today.

A technical achievement

As well as an important driver of future growth, the listing on Coinbase has been an important technical collaboration, carried out using the open-source Rosetta standard, which we are championing together with Coinbase. Rosetta is now an integral part of our integration armory, for future interoperability projects. Rosetta has the ability to seamlessly interlink numerous blockchains, allowing institutions to manage multiple assets, without spending months researching the various technical implementations.

Bloomberg goes live

Also, this week we received the news that financial data powerhouse Bloomberg has added Cardano to its informational roster. Since it was launched in 1982, Bloomberg Terminal has established a reputation among the finance industry as an essential source of real-time information for markets. As the company states, it helps “the world’s business and financial decision-makers surface relevant information in an ever-expanding ocean of data – and quickly act on it.”

So, what does this mean for Cardano & crypto

Bitcoin was added to the Bloomberg terminal back in 2014 and Cardano now joins a number of coins added to the roster since. More recently, cryptocurrencies, and digital assets in general, have seen a resurgence in interest from Bloomberg’s customers. Bitcoin recently hit an all-time high of $60,000. Meanwhile, non-fungible tokens (NFTs) have entered the mainstream, following the recent sale of artist Beeple’s entirely digital work, Everydays: the first 5000 days for $69m, just as Cardano has launched native tokens on the network.

The addition of ada to Bloomberg Terminal is the latest chapter in a year of continuing momentum and growing credibility in the eyes of the financial industry. It is important to place this news in perspective. Cardano’s mission remains clear and focused on bringing real utility and value to billions of people around the world – in particular, those currently without access to financial services and infrastructure. Our focus continues to be on delivering the enabling technology to achieve this while empowering the community which will ultimately deliver the platform’s growth. Nonetheless, it remains a validation of the work the whole community has done to get here and a powerful marker of our continuing momentum.

With the ‘Mary’ protocol upgrade, which will be implemented using our hard fork combinator technology, native tokens and multi-asset capability are coming to Cardano.

On February 3, we upgraded the Cardano public testnet to ‘Mary’ for final testing. We plan to deploy the Cardano update proposal to mainnet on February 24, which would therefore deploy ahead of the boundary of epoch 250 and take effect on March 1. If we need a few more days of testing, we'll deploy ‘Mary’ the following epoch instead, which will take a five-day period required for updates to take effect. ‘Mary’ has been successfully running on our testing environments for several weeks, so our confidence level remains high. As always, however, we’ll follow a strict process (developed and honed over the previous Shelley and Allegra HFC events) to get this right.

Once the code is successfully deployed to mainnet, we’ll release a new Daedalus Flight version for user testing, which will be our first Cardano wallet with integrated multi-asset capability. Once we are happy with wallet performance and usability, we’ll deliver the Daedalus mainnet release bringing the full-fat native token experience to every Cardano user.

Why native tokens?

Native tokens will bring multi-asset support to Cardano, allowing users to create uniquely defined (custom) tokens and carry out transactions with them directly on the Cardano blockchain.

The use of tokens for financial operations is becoming ever more popular. It can cut costs at the same time as improving transparency, enhancing liquidity, and, of course, being independent of centralized entities such as big banks. Tokenization is the process of representing real assets (eg, fiat currencies, stocks, precious metals, and property) in a digital form, which can be used to create financial instruments for commercial activities.

Cardano will provide many tokenization options. With the ‘Mary’ upgrade, the ledger’s accounting infrastructure will process not only ada transactions but also transactions that simultaneously carry several asset types. Native support grants distinct advantages for developers as there is no need to create smart contracts to handle custom token creation or transactions. This means that the accounting ledger will track the ownership and transfer of assets instead, removing extra complexity and potential for manual errors, while ensuring significant cost efficiency.

Future and utility

Developers, businesses, and applications can create general purpose (fungible) or specialized (non-fungible) tokens to achieve commercial or business objectives. These might include the creation of custom payment tokens or rewards for decentralized applications; stablecoins pegged to other currencies; or unique assets that represent intellectual property. All these assets can then be traded, exchanged, or used as payment for products or services.

Unlike ERC-20 tokens that are based on Ethereum smart contracts, the tracking and accounting of custom tokens on Cardano is supported by the ledger natively. Because native tokens do not require smart contracts to transfer their value, users will be able to send, receive, and burn their tokens without paying the transaction fees required for a smart contract or adding event-handling logic to track transactions.

Working with native tokens on Cardano

In creating an environment for native tokens, we have focused on simplicity of working, affordability, and, of course, security.

Depending on their preferences and technical expertise, users will be able to choose from three ways to create, distribute, exchange and store tokens:

• Cardano command-line interface (CLI). Advanced users can currently access the CLI via a dedicated testing environment. We will deploy the CLI on the mainnet when we hard fork.
• A ‘token builder’ graphical user interface (GUI). This will follow the native token CLI launch, providing an easier way for creating tokens.
• The Daedalus wallet. Daedalus will provide support for sending and receiving custom-created tokens. Daedalus Flight will test native token functionality in March, which will be shortly followed by the mainnet release.

Let’s dig down a little into each option.

Working with Cardano CLI

Advanced developers can use the native tokens testing environment to create (mint) assets and send test transactions to different addresses.

The nature of working with the CLI assumes that someone is familiar with setting up and operating the Cardano node, and has experience in working with transactions and managing addresses and values. To create native tokens using Cardano CLI, one would need to:

• Set up and start the Cardano node
• Configure a relay node to connect to the native tokens testing environment
• Start interaction with the network (prompt Cardano CLI)
• Construct a monetary policy script
• Create tokens using the monetary policy script
• Finally, submit and sign transactions to transfer tokens between addresses.

Native token tutorials and exercises are available on our Cardano documentation site to help developers mint tokens, create monetary policies, and learn how to execute multi-asset transactions.

We are already seeing particular interest from stake pool operators for this. So far, hundreds of test tokens have been created, and we continue to improve the CLI based on feedback. We welcome your comments and encourage community testing.

Token builder: a user-friendly GUI for token creation

The CLI requires a certain level of development prowess. So we have devised other ways for less technically proficient users to create tokens. To achieve this, we plan to launch a token builder after the mainnet CLI launch.

The token builder is a graphical user interface that makes token creation easier. If you’re interested in creating tokens for your decentralized application, wish to tokenize your property, create NFT collector cards represented as specialized assets, or want to create a stablecoin pegged to the value of other currencies, the token builder can help with that.

To create a token you would just need to fill in:

• The token name (eg, Hello World)
• The token symbol (eg, HEW)
• The token icon (generated automatically)
• Amount to create (eg, 1,000)
• Cardano wallet address (your address to host newly created tokens).

The token builder generates the monetary policy automatically – you won’t need to define it yourself. This streamlines the token creation and simplifies it for a non-technical user.

Figure 1. The prototype token builder dashboard

Initially, the token builder will be supporting only fungible token creation (while non-fungible tokens can be created using Cardano CLI). In time, we’ll extend the functionality to allow creating non-fungible tokens and changing the monetary policy according to specific preferences. This means that users will be able to specify the conditions under which tokens are minted (or burned), or who has control over the asset supply, for example.

Finally, when tokens are minted, it will be possible to mint more by clicking the ‘Mint more’ button. This can be done based on the same policy to create more tokens of the same kind, or you can create other tokens that represent different values based on a different policy. For example, you can create more Hello World tokens, or, starting from scratch, you can create 500 ‘test’ tokens that will be used for other purposes (these will have a different minting policy).

The token builder aims to reduce the complexity of token creation and also focuses on the enhancement and visual presentation of functional processes. As an outcome, we aim to provide visibility around all the tokens created, their values, quantity, and addresses between which they are being transferred – all in one place.

Daedalus

Those users who do not wish to create their own tokens but who want to use existing ones for payments, purchases or exchange, will be able to use such wallets as Daedalus, and later Yoroi.

The Daedalus team continues to work on integrating the wallet backend with the user interface to support the native token functionality. Users will be then able to hold native tokens in their wallets, send and receive them as they would do with ada.

Native tokens are uniquely identified by two hexadecimal numbers stored on-chain ‒ the Policy ID and the Asset Name. Considering that these numbers are not 'human-friendly', we have created fingerprints for easier identification of native tokens by users. Fingerprints are 44 character long alphanumeric strings beginning with the prefix 'token'.

Additional token data displayed in the wallet UI (name, description, and acronym) will be provided by the Cardano token registry, administered initially by the Cardano Foundation.

Figure 2. Daedalus native tokens UI

Native token lifecycle

When all the necessary components are deployed, the native token lifecycle will be complete. It consists of five phases:

• minting
• issuing
• using
• redeeming
• burning.

Figure 3. Native token lifecycle phases

During these phases, asset controllers will be able to define the policy for the asset class and authorize token issuers to mint or burn tokens. Token issuers can then mint tokens (for applications, for instance), maintain their circulation, and issue them to token holders. Finally, token holders (eg, individual users or exchanges) will be able to send tokens to others, use them for payment, or redeem them when they have finished using them.

What’s next?

We launched the testing environment in December 2020, laying the foundation for native token development. We also added a staging environment to enable initial testing by exchanges and stake pool operators. It features a faucet and allows a network of nodes to be built while connecting to the relays.

Follow our Cardano status updates to see our weekly progress. As we expand the capabilities of the native tokens, and add tools and interfaces, we’ll be providing documentation and tutorials to encourage people to get involved. Naturally, the codebase is open source and we have already seen a number of interesting community projects emerge (around digital collectibles, for example).

So a lot will be happening in late February and early March, from final testing and the HFC event, to native tokens on Cardano within a brand new Daedalus wallet experience. Exciting times ahead!

Find out more by joining other community members to discuss native tokens in the Cardano Forum's dedicated native token section. And don't forget to sign up for our devnets program.

Additional technical input by Olga Hryniuk.

Portrait of Mary Shelley by Richard Rothwell (1800-1868)

The Goguen rollout continues with another key building block in Cardano’s evolution into a decentralized, multi-asset (MA) smart contract platform. The Goguen ‘Mary’ update – named after author Mary Shelley – introduces the ability to create user-defined tokens. These custom tokens will be ‘native’, so they can be transacted directly on the blockchain, just like ada. While ada will remain Cardano’s principal currency, Cardano will transform into a multi-asset (MA) blockchain, opening up a constellation of possibilities. This MA capability will become a fresh development fulcrum for developers worldwide, further widening Cardano's reach and potential.

Another hard fork?

Yesterday, using what was effectively a hard fork, we successfully deployed the Mary update to the Cardano public testnet, for final testing prior to mainnet deployment. This forking event is a crucial step in the process, as the Testnet is as close an environment to the Mainnet as we can get. Once we deploy all the elements on the Testnet, invite devs to dive in and monitor the results, we can accurately ascertain how the Mainnet will behave.

Hard forks tend to be disruptive events because the history of the pre-forked blockchain is no longer available. Without careful planning, testing, and execution there can be unintended consequences. Earlier blocks can be lost when the protocol rules are altered, for example.

However, Cardano handles hard fork events differently. We use a hard fork combinator to combine protocols without triggering service interruptions or a network restart – and, crucially, the combinator maintains the history of the previous blocks.

Cardano has undergone several development stages, and the quest is far from over. Goguen is happening now. We’re seeing the early steps toward Voltaire now with Project Catalyst, and Basho will follow. Each stage brings Cardano's journey closer to its ultimate destination: True decentralization and scalability, utility, and sustainable governance. And each stage will use the combinator, a tried and tested technology, to power the transition. We first used it for the Byron to Shelley upgrade, proving the combinator's effectiveness in achieving a seamless transition. Allegra, which introduced token-locking in December, used it, too, as will Cardano’s next development stages.

How we got to Mary

The advent of token-locking with Allegra, though a relatively small technical change to the Ouroboros protocol in itself, established the threshold for Cardano's multi-asset strategy, and the network's future as a whole. The change readied the platform for smart contracts and the support of native assets other than ada.

Allegra laid down the foundations for Mary with the introduction of production-ready code so engineers could start testing. This work covered features such as defining a monetary script, minting, redeeming and burning tokens, and sending tokens in a transaction.

Just before the holiday break, a programming interface (command line interface -CLI) was added for the wallet backend. Since then, updates for that wallet backend and interface, along with explorer support for multi-currency blocks, have been underway.

We are now finalizing the integration of the completed wallet backend with the metadata registry, and the Rosetta API (a common interface for exchanges to interact with the Cardano blockchain) will be updated to support multi-assets.

The metadata registry

The concept of metadata is worth explaining here. In Cardano, metadata is a description of the native assets that people can read. These assets are stored on-chain using identifiers which are non human-readable. The readable version of this information is stored off the blockchain, in public token registries. These registries – initially managed by the IOG – will ultimately be owned and be configurable by the community, thus enabling another layer of Cardano's decentralization goal. By empowering the community to own and configure these registries, we ensure that the community can fully trust the datasets, as the users themselves are the owners of the data, so it's in their best interest to act honestly.

Mary is almost here

The Mary codebase is due to be deployed on mainnet by the end of February, assuming all final testing goes as planned during the month. Mary's arrival is the first in a series of evolutionary stages that will enable the community to benefit from these new capabilities:

• Yesterday, we successfully deployed the Goguen ‘Mary’ code onto the Cardano testnet. The SPO community and internal teams are now doing final UAT on this.
• The Cardano explorer (the tool that retrieves and presents blockchain and transaction information from the Cardano network) has also been updated and released for quality assurance testing yesterday.
• We also deployed a basic version of the Daedalus wallet, for testing the wallet backend.
• During February, the Daedalus wallet will be updated to include support for sending, receiving, and viewing multiple tokens , including integration with the new backend interface.
• The metadata registries (Github repos that store user-submitted metadata) will come online a little later this month.
• From the testnet phase onward, there will be support from our Technical Support Desk (TSD), a specific testnet wallet to view and transact tokens, and use of the registry to add metadata to tokens. There is also a dedicated dev support program run by our community team to support developers who want to get involved.

The deployment of Goguen ‘Mary’ marks a significant stage in Cardano’s journey. When Mary turns her crypto key within the network, we will unlock the mechanism for users to create their own tokens for a myriad applications: Decentralized Finance (DeFi), and countless other business use cases.

Next week, we’ll publish a blog post digging a little deeper into core native token functionality and what users can expect. Remember to follow us on Twitter and subscribe to our YouTube channel to get the very freshest updates as we continue the Goguen rollout.