Blog > 2021
2021: the year robots, and graffiti came to a decentralized, smarter Cardano
Beeple used to illustrate our blog posts, but art NFTs made him a millionaire, and then AI and DeFi arrived
27 December 2021 11 mins read
Incredibly, given the state of our Covid-shocked world back in January, 2021 has had its fair share of fun. And if 2020 was a big year for Cardano with the upgrade from Byron to Shelley, this year was bigger still. Decentralized block production arrived, tokens went native, contracts turned smart – and there were some world firsts. But, our review of the year is getting ahead of itself, so let’s think back to January....
A hundred community stake pools benefitted when IO Group set out its strategy for delegating its ada funds in 2021. All but one of the IOG public pools were closed and the stake was moved to community operators, to the tune of three million ada per pool. Throughout the year, some 300 pools benefited from the greater chance this gave them to mint blocks. Over the year, the total number of pools running the network has increased by half to about 3,000.
Then, IOG turned to encouraging developers and innovators with Project Catalyst. This experiment explores innovation and collaboration as the first stage in the Voltaire era of the Cardano roadmap. It involves investing actual ada with an initial fund worth $250,000 backing 11 proposals. Since then, it has become the largest fund of its kind, with total funds allocated worth $8m. And the community soon set up a Catalyst website.
In February, fun came to the Cardano blockchain when SingularityNet founder Ben Goertzel and Charles Hoskinson, IOG’s co-founder, got together to explore the future of decentralization, artificial intelligence and social media. As we’ll see later, it wasn’t the end of the shenanigans as the pioneering AI and robotics company began moving its systems from Ethereum to Cardano.
All was not well elsewhere in the crypto world, however, with US Treasury secretary Janet Yellen warning that bitcoin was ‘extremely inefficient’. It was just the start of legislators in Washington and around the world digging into the crypto industry.
March saw IOG bring out the ‘hard fork combinator’ again. This may sound like a piece of farm machinery, but it’s a clever way of taking the stress out of upgrading the blockchain. The Mary upgrade allowed Cardano to become a multi-asset platform. This means that anyone can now mint their own tokens, including non-fungible tokens (NFTs) without even needing a smart contract. Global commentators started to take real notice and the media rolled out its cliche-ridden ‘Ethereum killer’ articles.
A corner of the $69m artwork: Christie's sold Mike Winkelmann's Everydays NFT – as ‘Beeple’, his illustrations graced IOG blog posts for two years
Mike Winkelmann set the world alight when his NFT artwork, Everydays: the First 5000 Days, sold for $69,346,250 at Christie’s. The auction propelled him into an exclusive club for the highest price paid for the work of a living artist, alongside Hockney, Hirst, Johns, and Koons. As ‘Beeple’, his illustrations graced IOG blog posts for two years.
In Germany, a computer science student thought he’d have some fun with the new capabilities of Cardano. Alessandro Konrad switched from writing ‘boring’ smart contracts in Ethereum. He launched his own stake pool with Berry NFTs as rewards for people delegating to his pool. Next up was SpaceBudz NFTs, which he created with a pal. In just two days, 10,000 of these sold at 50 ada each – that’s one way to pay your way through university!
Blockchain graffiti: an animated Leonardo DiCaprio raising a glass of champagne on the CardanoWall
As the month neared its end, the CardanoWall arrived. This tool helps people put messages on the blockchain as metadata. Most people treat this blockchain graffiti as fun, but be warned – all human life is there. Messages range across the spectrum of high and low culture, from the personal to the political, the philosophical to the pornographic, the surreal to the mundane. Some are self-serving, others life-affirming. Early messages include: Wow! This is cool dude!’ and the Robert Burns poem To a Mouse, ‘Wee, sleekit, cow'rin, tim'rous beastie…’ The first picture appeared at epoch 256, slot 314,340, an animated image of Leonardo DiCaprio raising a glass of champagne. It was soon followed by a view of farmland and, perhaps inevitably, a cat.
D-Day tweet: ada coin creation was handed over to more than a thousand stake pools on March 31
The last day of March was a landmark; it was D=0 Day. This was when IOG devolved block production totally to stake pool operators. Full decentralization had arrived.
The global buzz around Cardano grew louder with the announcement of an education program with 3,500 schools and five million pupils in April. Blockchains offer great promise in helping to achieve inclusive growth in African economies, and IOG aims to be at the forefront of this progress.
But school was definitely out when CardanoKidz hit the streets. These cartoon NFTs were based on IOHK staff – heaven knows what posterity will make of them!
In May, the COP26 climate change conference was still six months away, but analysts and the media were latching on to Cardano as the environmentally friendly blockchain. Anthony Cuthbertson’s profile, ‘The “green” crypto that hopes to surpass the tech giants’, started the trend.
Another form of media, Wikipedia, saw a record number of hits for its Cardano page, with 13,702 visits on May 15. A year before, there had been no Cardano page because editors pushing a ‘blockchains are terrible’ agenda had taken it down in 2019 as not being ‘notable’. Such was the level of censorship that there was no reference to Cardano – apart from a graphic showing it as one of the top 10 coins! A mention that Philip Wadler, one of the world’s leading computer scientists, was working for IOHK was deleted as ‘spam’. Demand for a Cardano page was demonstrated when it had 5,195 visits the day after it reappeared in October 2020, surpassing Ethereum’s 1,719. Yet, even now, the Cardano page is still under heavy sanctions and only a few Wikipedia editors can add to the copy.
Fun with AI was back when the Hoskinson and Goertzel show took to YouTube again for an update on moving to Cardano, and a chat with Grace, a cutting-edge healthcare robot. Grace asked about the IOG chief’s pet giraffe – and revealed that ‘she’ didn’t like technology!
Nervos, Nexo and Orion all announced projects with Cardano in June, developments with the Daedalus full-node wallet were discussed, and chief scientist Aggelos Kiayias set out the thinking on stabilizing transaction fees by establishing a ‘peg’ to a basket of commodities or currencies. Two months later, development of the Djed stablecoin was announced.
A version of John Conway's Life is a background option on IOG’s home page and Stephen Wolfram used such cellular automata for its live minting of NFTs in July. The Christmas-tree shaped image at the top of this post is one of the images generated.
Africa focus: 250,000 people have watched a video about IOG’s activities in the continent
The importance of mobile phones for global development has long been promoted by the United Nations, and it has recognized the potential for digital technologies such as blockchain. So IOG teaming up with World Mobile in August to help bring cellular networks to some of the remotest regions of Africa should be a boon. More than a quarter of a million people have watched John O'Connor’s video about IOG’s activities in Africa. The mobile deal was followed by the European Business University of Luxembourg offering programming courses to African students.
The month produced a surprise when Ethereum co-founder Vitalik Buterin joined the Dogecoin Foundation board.
The prospect of decentralized finance (DeFi) clearly terrifies politicians in the US. The Financial Times pointed to the furore over imposing tax reporting rules on crypto ‘brokers’, a prospect buried in Joe Biden’s $1tn infrastructure plan. One result was that it brought the fractious blockchain industry together.
Cardano's metaverse: 140,000 people logged into the summit, hosted on the back of an ocean-going mythical turtle
September was a busy month. El Salvador became the first country to adopt a cryptocurrency as legal tender. At IOG, the company ramped up for the Cardano Summit 2021 with 70 hours of presentations from 200 speakers. Over two days, 140,000 people logged into the event’s metaverse, hosted on the back of an ocean-going mythical turtle. There was something for everyone, with more fun with robots and debate about the future of art among the technical and community talks. And during the summit the millionth Cardano NFT was minted. And last but not least, September saw the deployment of the Alonzo upgrade, bringing core Plutus smart contract capability to Cardano. Decentralized finance had arrived. As Tim Harrison put it at the time, it was a cause for celebration but really just the beginning of a journey that is now starting to gather pace.
The buzz around the summit and the Alonzo hard fork event attracted the editors at the Harvard International Review, which did a three-part interview in October with IOG’s chief discussing Cardano, the developing world, the future of crypto, and financial regulation. Meanwhile, the strength of the collectibles market was shown when it was reported that the woolly-booted, axe-wielding SpaceBud #9936 had sold for 510,000 ada – the first Cardano NFT to fetch the equivalent of a million US dollars. Plus we saw projects such as Meld gearing themselves up for launch with the first initial stake pool offerings.
Bison-herder Charles Hoskinson also took an IOG team to Africa in October and introduced us all to the ‘smart cow’ effect.
November saw Pool.pm’s count of the number of NFTs minted on Cardano pass the two million mark – and Andy Warhol came to the blockchain. Gallery owner Rudolf Budja launched a ‘fractionalized’ NFT sale so people could ‘own a piece of an Andy Warhol’.
Eagle-eyed Cardano watchers spotted a Cardano logo on the proposed cover of The Economist magazine’s The World Ahead: 2022. This annual analysis sees crypto as a battleground. Fighting for control are the decentralization pioneers building the technology, the big tech barons like Facebook and Google, and governments. The end of November saw the launch of the MuesliSwap decentralized exchange, a Cardano first generating – as might be expected in such a febrile environment – its share of bouquets and brickbats.
December brought the launch of the P2P testnet, a milestone in Cardano’s decentralization journey. Along with this came a release of the Plutus application backend, which will become a set of libraries to help speed development on Cardano. The number of Wikipedia page views for the Cardano page passed the million mark for the year.
SingularityNet ERC20 converter: a child explained how to convert the AI pioneer's tokens to Cardano
If all that’s not intelligent enough for you, the much-anticipated testnet for an ERC20 converter to switch SingularityNet’s internal AI token to Cardano sparked a lot of interest. And if it still all looks confusing, see the converter explained by a six-year-old. The past few weeks have also seen more projects start to launch on Cardano, from NFT marketplaces such as Tokhun, Cardahub and CNFT.io adding smart contract integration, to domain naming project Adahandle. And as the DeFi ecosystem starts to take off, in late December, an alliance was announced to help speed it on its way through standardisation and best practice in the shape of the Cardano DeFi Alliance.
As the year draws to a close, we invariably look to the past and the future, as The Economist has done. It's been an incredible year of growth with a community that continues to light the way. We’ve also seen more than our fair share of opprobrium from critics and purveyors of fear, uncertainty and doubt – the ‘FUDsters'. Yet, still we have persevered and start the new year stronger and more resolute than ever. So, in the words of Auld Lang Syne, let’s try to all ‘tak a cup o' kindness yet’ into the next year and hope for a healthier, more blockchain-intelligent 2022.
Cardano education in 2021: the year of the pioneers
It was a busy time for the team at IOG – and the next 12 months look busier still
23 December 2021 5 mins read
2021 saw the launch of our Plutus Pioneer and Atala Pioneer programs. These interactive training courses aim to widen the reach of our education materials and have been completed by thousands of people.
The feedback we’ve received about the lectures, delivery, and support has been very positive and demonstrated a high level of commitment to learning. So we are planning some new programs in other disciplines for 2022 and more courses about both writing smart contracts in Plutus and the Atala digital identity software. DeFi – decentralized finance – aims to provide direct peer-to-peer financial transaction capability between individuals and companies, without central authorities.
How the programs were run
During these programs, participants attended weekly lectures delivered by Lars Brünjes, director of education at IOG, who also held weekly follow-up interactive Q&A sessions. People were supported by a thriving community in the Discord chat system that encouraged collaboration and problem-solving. These channels were moderated by the IOG education team, who were on hand to provide support. During the courses, Lars aimed to create a ‘we’re all in this together’ feeling and a ‘pioneer’ spirit, which was certainly evident across the dedicated channels in Discord.
The education team encouraged the enthusiasm and good will of the pioneers, so they helped and supported each other, creating a tightly-knit community in the process. In addition, we encouraged pioneers to help the next group and pass on their knowledge. The power of peer-to-peer learning cannot be underestimated.
When we launched the first Plutus Pioneer course in March, we were hoping for solid community support and engagement. We never envisaged that we would close out the year with more than 3,500 participants trained up on Plutus and Atala and ready to start building on Cardano.
We have now wrapped up the Atala Pioneer program, and are taking some time to reflect on the detailed feedback and how we can improve the experience further for the next cohorts.
Plutus has a steep learning curve, and it was still a bit rough around the edges, which worried me a bit in the beginning. But the enthusiasm and spirit of “we’re all in this together” I received from the community was overwhelming, making the course a tremendous success.
Outcomes of the courses
One of the most positive outcomes of these courses was the amazing community participation that we witnessed on Discord right from the start. The participants supported each other, published additional material that they worked on, were quick to report any issues, and got stuck in when it came to fixing bugs – they really were acting as true pioneers. Their assistance and testing efforts through the Alonzo testnet rollout were also highly beneficial.
We also saw a wide range of innovative materials and ideas from the courses, including new wallets, training materials, and new projects on Cardano.
This year also saw the start of a partnership with the European Business University of Luxembourg (EBU) in September. EBU is a renowned educational provider and non-profit organization dedicated to higher education and certificate programs.
This partnership is sponsored by the IOG education team and aims to make education more accessible in the African region. It will give a wealth of students access to educational material for free, while also supporting the IOG strategy in the region.
EBU launched its first Plutus and Haskell course in late September, and is wrapping up after a 10-week course that was well attended and received.
What is on the horizon in 2022?
We are currently planning for the third cohort of the Plutus Pioneer course, which we are launching in early January. Enrollment is now open, so please express your interest on our registration page and we will be in touch soon. In the meantime, we are updating the lectures and materials to bring them up to speed with developments and recent tooling updates in Plutus.
We have also held planning workshops with the Marlowe team. They are working on their first Marlowe Pioneer program early next year. Meanwhile, the Atala team will be moving into their second cycle in the near future.
Within the education team, we are also working on self-learning courses. Participants will be able to pick and choose the modules they want to complete and work at their own pace, rather than follow a weekly schedule.
The next big project we are planning is a Haskell course that will be delivered in Ghana. The aim is to train up 80 student developers in how to transform local industries using blockchain technology. Ghana is striding forward in terms of blockchain, and this course will add to the pool of Haskell and Plutus developers ready to build smart contracts and DeFi applications on Cardano.
Last but not least, we are planning some new publications in 2022, including an updated version of the Plutus ebook later in the year.
To find out more about our education initiatives, follow IOG Twitter as well as the Plutus and Atala registration pages for more details.
Cardano at Christmas (and what to say if anyone asks…)
You may be taking some time out from crypto this holiday season. But if table talk does flow towards Cardano, here’s your conversation starter…
21 December 2021 7 mins read
'twas the night before Christmas, when all thru the house,
Not a crypto was stirring, not even Cardano
When American scholar Clement Clarke Moore wrote A visit from St. Nicholas, cryptocurrencies were certainly not in his mind. According to historians, Clarke wrote the piece as a Christmas treat for his daughters, and read it aloud as the family gathered together on Christmas Eve, 1822.
Christmas celebrations were probably less complicated in the first quarter of the 19th century, and perhaps more truthful to the spirit of the season than in later decades. Conversations around Christmas dinner today also involved family matters, for sure, but the topic of cryptocurrencies and blockchain does come up, more and more frequently. People are getting curious about this new and seemingly inscrutable digital world.
There are many big names out there. For better or worse, everyone has heard of Bitcoin. And some may have heard of Ethereum, too, or become aware of the dog-meme coin craze of past months. But the question is, how do you explain Cardano to the family?
The stake pools were hung by the chimney with care
Christmas and the holiday season is all about food, family, and fine spirits (not necessarily in that order.) The day is long and merry and full of inquisitive minds. Certainly, we’d advise putting the phone down and switching off from the crypto craziness that will still be waiting for you when you return. But should you find yourself cornered at the hearth by some crypto-curious relatives who just need to know about ada, and Cardano, and blockchain, and all that, well, this is how the tale goes.
Cardano is a digital ledger that uses ada as its native currency. This digital ledger, which you can think of as a fancy version of the old-fashion accounting book, is called a blockchain because new blocks are appended to the ledger all the time, so it keeps growing. Those blocks contained transactions with ada, and other digital tokens.
Cardano is decentralized. This means that, unlike a bank for example, there is no central authority regulating what happens in the network. Cardano is effectively a piece of software run by thousands of people to create a network that can be used by millions. And over time, Cardano will become an entirely self-regulating network, with decisions about its future taken by the community.
Who produces the blocks that make up the blockchain? Well, that’s the job of what are called stake pools. These are network nodes (think computers) that are responsible for processing the transactions, and these add new blocks to keep Cardano growing. Stake pools really are at the heart of Cardano. People who hold ada can delegate some (or all of it) to these stake pools – via a wallet application they can run on their phones or computers – and get rewards regularly.
So decentralization is a key aspect of blockchain, and one that you need to understand. It is an environment where trust is implicitly established by something called consensus protocol. In Cardano, this protocol is Ouroboros, named after the ancient symbol for eternity. Think of Ouroboros as a behind-the-scenes music director orchestrating all the different components within Cardano. A ‘conductor’ that ensures all the different instruments are in tune, on tempo and playing the same score.
And you want to know one of the best things about Cardano? You have probably heard about climate change, energy crisis, etc. Cardano is very much a green blockchain, as it consumes far less energy to produce new blocks than the Bitcoin or Ethereum networks. That is because Ouroboros is a proof-of-stake protocol.
Let’s talk about decentralized finance
Banks and credit unions charge a lot for their services, and when you deposit your money with them, you get next to nothing in return. There was always an imbalance with traditional finance. But it just isn't working anymore, right?
Blockchain technology offers a way to move away from all that, thanks to something called decentralized finance, or DeFi. In legacy finance, the bank dictates and regulates what happens with the money you deposit. And every time you need a loan or access credit, the bank has the ultimate power to decide whether or not you are granted access to those facilities. That's because traditional banking is centralized around banks, or credit unions.
DeFi turns the tables and empowers the individual to make the decisions. This is possible because DeFi works in peer-to-peer fashion. Person to person, with no need for banks.
Why do I tell you this? Because Cardano is part of DeFi. And we want to take that a step further with RealFi, providing millions around the world with a digital identity to allow them to access this new breed of financial services. Cardano is built by people, for the people. Cardano wants to create a financial environment that is fair and inclusive, where people can make the decisions that have, for many years, been made by all those institutions on people's behalf.
Banks may have acted as middlemen, facilitators. But people keep the economy going, you see. And often, people need access to finance to do just that. Maybe they need some liquidity to open a business, or they might be smallholders in developing nations who might have to buy fertilizer, or simply pay their providers. And often, banks might not be able to help, because of past credit issues, or quite simply, because some people in remote or rural areas of the world cannot prove who they are. Did you know that there's about a billion people in the world who have no legal identity?
There's where Cardano steps in, thanks to real finance, or RealFi. Cardano can give those billion people an identity. A digital identity, in fact, which they can use to access finance. RealFi creates value and opportunity for the real people who really need these things.
Down the chimney ada came with a bound
Remember we mentioned ada, the currency that Cardano uses to pay for transactions, rewards, etc.? (And by the way, the coin is named after Ada Lovelace, a mathematician, and the daughter of Lord Byron.) You can purchase ada with fiat through some websites called exchanges. Or swap it for other cryptocurrencies through decentralized exchanges. So you buy/swap your ada, and store it in a wallet. Cardano uses two ‘official’ wallets, Daedalus and Yoroi. Yoroi is a 'light wallet,' that is, it's an extension that you add to your internet browser. Daedalus is a ‘full’-node’ wallet that stores the entire history of the blockchain making it more secure but slower. You can also choose from a number of community-build wallets - remember, as an open source decentralized project anyone can build products or solutions for Cardano.
Once you have ada in your wallet, you can use it to pay for transactions, delegate to stake pools (remember the stockings?), or trade it for other cryptocurrencies by using exchanges. Or of course, you can exchange it for NFTs – but if your relative hasn’t picked up any of the news about that in recent months, you’ll probably need boxing day to get them fully up to speed…
Make Cardano part of your New Year's resolution
So there we have it, a very simplified, concise introduction. But hopefully, it means explaining Cardano to your friends or family needs not be a chore nor a complicated matter. So as the glasses clink and the turkey gravy flows around the Christmas table, tell a tale of awe, of a blockchain merry and full of wonder, one that will make the crypto world go yonder.
When it comes to DeFi, Do Your Own Research
With the #Cardano ecosystem growing fast, it’s more important than ever to research before getting involved with a project. In these exciting times, let's be careful out there
9 December 2021 11 mins read
Distributed applications (DApps) are coming to Cardano. The excitement is palpable. Yet, as the ecosystem steps up a gear, the excitement about this new stage in our journey needs to be tempered with some caution.
Cardano is an open, permissionless blockchain. So there is no central company, or other body, exerting ownership and, with it, responsibility. Anyone can build on this platform and engage the community. This is one of its superpowers. Yet because anyone can build DApps, users need to be judicious. As the saying goes, ‘Do your own research’.
Researching means more than scrolling through search results or watching your favorite YouTuber talk about moonshots or chart patterns. By doing your own due diligence and taking your signal from the right community voices (amid the noise), you can give yourself the best chance of navigating the emergent landscape successfully. And with it, play your part in helping grow a safe, secure, and healthy ecosystem.
Some cautionary tales
Bad things have already happened on other chains.
- On December 3, 2021, Cryptocurrency News reported that 120m US dollars were lost in the Badger DAO hack.
- On November 30, 2021, Crypto Briefing reported that users lost 31m US dollars on Ethereum and Polygon.
- On November 19, 2021, CNBC reported that, according to Elliptic, over 10bn US dollars had been lost to scams and thefts so far in 2021. You can download the original report from Elliptic.
- On November 3, 2021, The India Bureau of Business Insider reported that 1.4bn US dollars had been lost in DeFi hacks, with about half recovered.
- Fraud also occurs in the UK. On October 18, 2021, Coindesk reported that, according to the City of London Police, over 146m pounds had been lost to fraud in the first ten months of 2021.
And finally, the SolanaBankBox project sounded good - until it wasn’t.
Now, publishing this list here isn’t meant to throw shade or proclaim superiority. There is no room for hubris here. Real people have lost real assets. Rather than look at these incidents with hubris and “It couldn’t happen to me,” we should take a position of empathy and take these hard lessons on board. Because we will have issues on Cardano, however much rigor has gone into the core platform. But together as a community, we must seek to minimize the chance and the severity when it does happen to us.
We have worked extremely hard at a core platform level on security. The core Cardano platform has been built to the most exacting standards. Cardano’s design is based on peer-reviewed academic research. Then, using formal methods, we create high-assurance software. The result is that Cardano provides a resilient, scalable platform. We add a full set of development and testing tools, including a testnet, to the platform. As part of our toolset, we support programming languages that suit formal verification by skilled software engineers.
Meanwhile, our education and support programs enhance the skills of the whole community. Wherever we speak to new Cardano DApp developers – and we have spoken to dozens already – we are strongly recommending that they commission an independent external audit for every DApp they create. As we advance, the new Plutus dAppStore will have three levels of certification available for DApps that choose to take advantage of it. Certification will be highly recommended, but it will never be mandated on a decentralized platform.
However, decentralization doesn’t mean we should accept a ‘wild west’ environment. Even with the noblest intentions, some DApps will include design flaws, have bugs, or be poorly supported by inexperienced devs. These issues could leave low-quality DApps more open to being hacked. There will even be DApps that are outright scams or rug pulls. Sadly this is inevitable at some point. And of course, our detractors will seize on these issues and seek to amplify them to damage our community.
It is the responsibility of each DApp developer to ensure that their application produces the correct results. Meanwhile, every responsible member of the community should do their own research and help educate others. In the end, it is up to individual users to protect themselves from bad actors. So be curious, even skeptical. Ask questions. Accept nothing at face value. Equally, be cautious in calling out scams - with so much FUD about, you should not add to the noise without due deliberation. And many of us will remember this cautionary tale from our childhoods…
So here are some tips, curated with the support of the Cardano community.
A fact checklist
Who are the developers?
Developers proud of their product will be easy to contact and responsive to questions. There should be a project website. Anonymity or pseudonymity is relatively common in crypto, but it is important to know the developer can be traced if money is involved. It is much easier for anonymous developers to disappear with your funds. Even if fully doxxed, is this the developer’s first project? Devs or code shops with a reputation have more to lose, while inexperienced developers are more likely to make mistakes or take shortcuts, especially if there is a rush to launch.
What is the project’s vision?
Do your best to ensure that the project’s values and actions align with your values. Look at decentralization, idealism, passion, and purpose.
FOMO is your enemy
If it’s a great application now, it will be a great application next week and next month. If the developer plays on your fear of missing out, that is a big red flag. Due diligence takes time. Be diligent.
Is it really, really good?
The old saying applies. If it’s too good to be true, it probably is. If the project offers higher than normal staking rewards, you need to be hyper-vigilant and very thorough in your investigation.
Endorsements can be bought, and they are often an essential ingredient of a pump and dump or rug pull. By design, retail investors first discover a dump or rug pull when their basket of tokens is suddenly worthless. Don’t put your trust in YouTubers, but take note of YouTubers you trust.
Is the product open source?
Not all trustworthy DApps need to be open source. However, if the product claims to be open source, you should check the claim. For example, the GitHub repository should be accessible and active. The names of people on GitHub should match at least some of the people on the project website.
There may be a white paper, lite paper, or other design documentation.
Perform a thorough fact check: check sources, investigate authors, ensure content is authentic and not plagiarized. Evidence of poor proofreading, missing content, or broken links in references should all raise concerns. If the white paper is on a ‘pay to publish’ site, you should take that into consideration.
If the project has an associated token, use a chain analysis tool to check for a concentration of token ownership. For example, it would raise concern if most of the project's tokens were allocated to a handful of wallets.
Is it a new project, or is it ported from another chain?
Check its reputation in its past life, if it had one. It still takes good developers to take full advantage of the Cardano platform.
If it is a new project, how new is it? Do the participants have any history in the crypto space?
Is the developer engaged on social media?
Look for an active community of users and reviewers. Look to see how recently the entities associated with the project were created. Be suspicious of new accounts with only a few tweets. Check the number of followers, too. Tools like Sparktoro are another way you can check real v fake followers.
How much testing has been done?
We would expect a good project to have been active on the testnet – and offering commentary in social channels – before its mainnet launch. The ongoing activities from projects like SundaeSwap and Adahandle are good models here, promoting the testnet launch through social media to allow end-users to test and build their understanding. We look forward to supporting more over the coming weeks and months.
Has an external audit been conducted?
Look for a respected organization that is independent of the developer. See below for some useful organizations.
Review the product against your requirements
No matter how good the product, it must be right for you. If you are looking to earn extra ada rewards or trade, it remains forever true – never risk more than you can afford to lose.
Some useful organizations
External organizations can help you learn more about the developer of the DApp. Also, DApp developers can enlist external companies to help with the development process.
More information about developers
- Check the Binance Project Reports page. It aims to cover the top crypto-projects and provide unbiased information.
- The Messari site provides research reports for organizations or individuals.
- Crunchbase provides data about organizations and individuals. There is a free trial; otherwise, this is a paid service.
- PitchBook is a financial data and software company. There is a free trial option available here too.
- Search LinkedIn profiles of people and companies.
- Use BetterWhois or a similar registry to find out when a website was created and basic details of who is behind it.
Companies that help with DApp development
- QuviQ is a Swedish company that specializes in property-based testing.
- Runtime Verification performs security audits. They have done a lot of work with IO Global.
- Certik, founded in 2018 by Yale University and Columbia University academics, is a pioneer in blockchain security. Certik uses best-in-class AI technology to secure and monitor blockchain protocols and smart contracts.
- Tweag is a software innovation lab that helps technology start-ups improve their engineering performance and execute high-risk, high-reward projects. They will be familiar to many readers from their work with Cardano.
- Well-Typed is a specialist Haskell consultancy company. Again, they will be familiar to many readers for work on Cardano.
None of these sites offer any endorsement or guarantee of quality, but they are a good place to start:
Essential Cardano - a simple GitHub repo managed by IOG and directed to community PRs. The site aims to be comprehensive, and inclusion doesn't mean endorsement, but this is a good list. During 2022 the goal is to build out this resource - in collaboration with the community – as a more holistic ecosystem resource.
Cardano Cube – a community site with a mission ‘to make information more accessible by providing an overview of all projects and dApps building on Cardano’.
Building On Cardano – ‘a place to view what’s happening within the Cardano ecosystem’ from Stake Pool Operators Shamrock Pool & Cardano With Paul.
We shall continue to drive for higher standards of audit and certification for Cardano throughout 2022. We hope that initiatives like our DApp store will help drive better practice in #DeFi and #RealFi across the whole industry. But this will only go so far. Despite several years of development (and many failures) on other chains, this is still relatively early days for the space as a whole. No developer is infallible, no audit can be omniscient, no platform impenetrable.
As our industry matures, so will risk. Meanwhile, above all else, it is up to the community to develop an immune system that can identify the most obvious issues and help the headlines focus on the successes rather than the setbacks.
The way forward
The Cardano community can be a shining example of how to achieve success and safety without external regulation. Project Catalyst provides funds for development on Cardano, and some community challenges specifically target security.
As intelligent, skeptical consumers, users must demand only the best DApps. Supporting great DApps will nourish a population of honest, trustworthy developers. Together, we will reach our goal of becoming a flourishing, self-governing community.
The information provided here does not constitute investment advice, financial advice, trading advice, or any other sort of advice, and you should not treat any of this blog’s content as such.
Inclusion here of projects does not constitute an endorsement, guarantee, warranty, or recommendation by Input Output. Do conduct your own due diligence and consult your financial advisor before making any investment decisions or relying on any third-party services.
Thanks to community members including Shweta Chauhan, Dan Gambardello, Jaromir Tessar, and Matti Winnetou for their contributions to this piece.
Introducing our new peer-to-peer (P2P) testnet
We are working with a small group of stake pool operators on a new P2P testnet to further drive network decentralization
8 December 2021 3 mins read
Cardano continues to build momentum with more features and capabilities being steadily added to the blockchain. As we recently reported, we are optimizing the network to increase throughput so more transactions can be processed faster, and decentralized applications (DApps) and smart contracts created and used more efficiently. This week, we have kicked off an important new initiative to support our ongoing drive toward full decentralization with the launch of a new peer-to-peer (P2P) testnet.
Cardano ensures trust and security in a decentralized setting using proof-of-stake consensus through the Ouroboros algorithm. At the heart of this are about 3,000 stake pools run by operators (SPOs) who manage the distributed nodes that power the network. Clearly, in a decentralized and distributed network, there has to be reliable communication between these nodes. Central to this and vital for verifying blockchain activities is data diffusion – the process of sharing information about transactions and block distribution. This also enables the Ouroboros algorithm to make its ‘decisions’.
Until recently, Cardano nodes established connections with peers by looking up a file that described the static configuration of the network. The system also relied on nodes set up by IOG – with a community-managed and configured topology – that helped to establish network connectivity (read more about the evolution of network connectivity here). To increase decentralization and simplify node communications, we've been establishing a P2P network. Direct interaction between peers streamlines communication between the thousands of distributed nodes that will maintain the network without reliance on federated relays. This will be done by automated P2P networking components. Automating the process of peer selection brings us closer to a fully decentralized network and simplifies the process of running a relay or a block-producing node.
From the early days of the Shelley incentivized testnet through to the Alonzo testnets program, community-supported rollouts have been central to our approach. To expand testing of the P2P changes, we are now inviting some pool operators to a semi-public testnet. Eleven operators will help us test the automated P2P components before we expand the program more widely.
P2P is still an experimental feature. Although it will be part of future releases, we’re not yet integrating it into all our work. The pool operators will assess the environment by configuring their nodes for direct interaction with each other. P2P capabilities will be included in the cardano-node master branch and in merged pull requests to ‘ouroboros-network’ on GitHub.
The P2P mode will enable ‘churn’ to ensure dynamic promotion and demotion of peers. Updating network configuration will also be simpler for SPOs because their nodes do not have to be restarted.
The semi-public testnet will also improve the node’s Prometheus interface. It will include the following statistics:
- outbound connections: warm (active connections that don’t participate in the consensus) and hot (active connections that take part in the consensus)
- inbound connections: warm and hot
- uni-direction/duplex connections.
The assessment of network connections on the semi-public testnet will help us to gather valuable feedback and catch unknown issues. Once we are satisfied, we will then be ready to invite all SPOs to test P2P node communications on the public testnet. This will mark the implementation of a smart policy for peer selection. This policy will allow defining final metrics to compare with the previous, non-P2P setting. Most importantly, we’ll continue testing to verify that all the components work flawlessly in isolation as well as in combination in a wide range of network conditions.
Follow our weekly development updates to find out more about P2P network development and also check out the Ouroboros network repository for the latest updates.