In order to help decentralized finance (DeFi) emerge as a credible alternative to the conventional banking system, it is required that organizations in this category must collaborate and explore bringing applications and blockchain protocols together. According to an estimate by a tracking website called DeFi pulse, more than $75 billion have been locked into the DeFi domain. Most of this value is based on ERC20 tokens, although the Ethereum network’s cost and scalability-related challenges are becoming serious by the day.
To provide a credible alternative, Cardano is setting the stage for the new initiative in which the blockchain will support the migration of ERC20 on its platform. This will be supported through the Plutus smart contracts and Alonzo hard fork. Once these new tools are installed, ERC20 users can get their tokens on Cardano seamlessly while benefiting from the lower transaction cost of the platform and its high transaction capacity. In addition, users will also benefit from higher safety and enviable interoperability characteristic of the Cardano network.
The reason behind the selection of ERC20 is its huge popularity. However, the Ethereum network is increasingly becoming slow, and the cost associated with the blockchain is also hitting the users hard. By offering the Cardano platform for ERC20, Cardano will not only expand its network of users but also help the entire domain of cryptocurrency and blockchain technology grow in its popularity and appeal.
This development will also help the ADA (the native token of Cardano) enhance its value among investors. ADA Price Prediction is largely positive, and cryptocurrency experts expect the coin to reach $10 by the end of the year. If this project meets its desired objectives, ADA is likely to consolidate its position in the future. Ethereum is yet to develop a credible solution as far as the challenges related to cost and scalability are concerned. By offering the solution, Cardano seems to have raced ahead of its competing network in terms of offering users enhanced convenience.