Smart contracts have revolutionized the way we conduct transactions, and with Cardano’s new Alonzo Hard Fork, developers can now leverage the benefits of smart contracts on the Cardano blockchain. In this article, we’ll explore the basics of smart contracts, the two categories of smart contracts, and the three programming languages available for smart contract development on the Cardano platform.
Understanding Smart Contracts
Smart contracts are self-executing, pre-programmed digital agreements that are unchangeable and do not require intermediaries or third parties to execute. They are a critical component of blockchain technology, as they facilitate the exchange of value without the need for trust between parties. Smart contracts operate on a set of predetermined rules and conditions that are automatically executed when the contract’s conditions are met.
Two Categories of Smart Contracts
Smart contracts can be divided into two categories: financial contracts and application contracts. Financial contracts facilitate the exchange of value between two or more parties, while application contracts enable the development of decentralized applications.
Programming Languages for Smart Contract Development on Cardano
Cardano supports three programming languages for smart contract development: Marlowe, Plutus, and Haskell.
Marlowe
Marlowe is a domain-specific language that is specifically designed for creating blockchain applications related to financial transactions. Compared to a Turing-complete language, Marlowe provides better security, assured certainty, a guarantee of termination, and a better guarantee of behavior correctness. The language guarantees that contracts have a defined duration, no recursion or looping, come to an end, all actions are subject to a timeout, have a set length of time to be effective, and no assets are kept at the time of closing.
Plutus
Plutus is the smart contract platform of the Cardano blockchain. It allows developers to create apps that interact with the Cardano blockchain, develop smart contracts in a predictable and deterministic environment, and acquire new assets safely. Plutus enables all programming to be done in Haskell using a single library and supports the creation of fresh tokens in a minimal environment, the construction of smart contracts, and simple multi-signature scripts.
Haskell
Haskell is a functional programming language that is used by Cardano for smart contract development. Haskell regulates Marlowe, and its elevated degree of certainty allows developers to ensure that the implemented code is robust and correct. Haskell was named after Haskell Curry, a famous American mathematician who laid the foundation for functional programming languages in the 1990s.
How to Create Cardano Smart Contracts: A Step-by-Step Guide
Smart contracts are a crucial aspect of blockchain technology, as they enable self-executing transactions with the terms of the agreement between parties being directly written into code. Cardano, one of the leading blockchain platforms, offers Marlowe, a tool for creating smart contracts. In this guide, we will explore the eight distinct steps of creating a smart contract on Cardano using Marlowe.
Step 1: Pay
The first step in creating a Cardano smart contract is to define a payment agreement. This is done through the Pay function, which transfers the value of a token from one account to another. The transfer can be made to a contract participant or another account within the contract. If there are insufficient funds to complete the payment or if the value is negative, warnings will be produced. The continuation of the contract is indicated by the term “cont.”
Step 2: Close
The Close function specifies how the contract will be canceled or terminated. Its primary function is to reimburse account owners with a positive balance. This process is repeated for each account, but all accounts are reimbursed in a single transaction.
Step 3: Values, Observations, and Actions
Before moving on to additional types of contracts, it’s essential to define values, observations, and actions. Values refer to numbers that vary over time, such as the current slot number or the current balance of a token in an account. Observations are Boolean values obtained by value comparison and can be merged using Boolean operators. Actions occur at specific moments during execution and can include money depositing, selecting one of several possibilities, or indicating some external worth.
Step 4: Oracles
Oracles are modeled as decisions made by a participant with a specialized Oracle role, such as “Kraken.” If a contract’s role is Kraken, and that role makes an option, the Playground simulation will pre-fill this choice with the current value of the direct ADA/USD conversion rate based on data from Cryptowat.ch. The inverse rates of the currency pairings can also be acquired by replacing the prefix “inv-” with the prefix “inv-.”
Step 5: If
The If function enables conditional statements to be made within a smart contract. If the condition is true, the contract will continue as cont1 or cont2, depending on the Boolean value of the observation obs.
Step 6: When
When a function is a contract triggered by activities that may or may not occur at any given time. The cases in the contract explain what occurs when certain actions occur. When cases timeout cont. is the most complicated contract function. According to the contract, a collection of cases is added to the list of cases. Each case takes the form Case ac co, where ac denotes action and co denotes a continuation (another contract).
Step 7: Let
The Let function allows a contract to name a value with an identifier. The expression value is evaluated and saved with the name id. This technique not only allows us to utilize abbreviations but also enables us to capture and preserve volatile data that may change over time.
Step 8: Assert
The Assert function does not affect the contract’s state, but it provides a warning if the observation obs is untrue. It may be used to guarantee that a property holds at any point in the contract.
What Sets Cardano Apart from Other Blockchains?
Cardano blockchain has emerged as a popular alternative to other blockchain protocols, thanks to its focus on scalability, sustainability, and interoperability. Let’s explore what makes Cardano blockchain stand out from its competitors.
Peer-Reviewed Research and High-Assurance Code
Cardano’s protocol development process is unique as it is based on peer-reviewed research, and high-assurance code is used at the highest levels of engineering. The protocol is developed using Haskell as a functional language, which is well-known among academics and developers for its combination of academic and industry-grade expertise with fundamental computer science qualities and codes.
Plutus and IELE for Smart Contracts
Cardano smart contracts must be written in Plutus or IELE, designed to provide a better level of certainty. Plutus is a smart contract language written in Haskell, enabling developers to create more secure and trustworthy smart contracts than writing them in any other smart contract language. The Plutus Platform serves as an accessible toolkit for developers to construct smart contracts that can enable both on-chain and off-chain code.
Stakeholder Asset Transfer
Cardano’s future strength lies in its capacity to operate as a binding and trustworthy entity to transfer shareholder assets. Stakeholder assets are necessary for the contracting parties to participate, and the contract’s assets are transferred following a set of rules agreed upon by the parties and programmed into the contract. However, monies pledged to a smart contract will never be “frozen” indefinitely, as writers can implement a timeout to ensure that money is repaid after a certain span of time.
Use Cases of Cardano Blockchain
Crowdfunding
Crowdfunding has emerged as a popular method of obtaining startup cash, and a smart contract built on the Cardano blockchain may be used to represent crowdfunding campaigns with transparency and the assurance that funds would be refunded to donors if certain conditions are not satisfied. The contract is influenced by time and the acts of others, and if the project’s goal is not fulfilled after a specified period of time, the money is refunded to the backers.
NFT Marketplace
With various updates on the Cardano platform, you can also develop your NFT Marketplace on the Cardano blockchain platform. NFT Marketplace built on Cardano is realistic with reliable security, efficiency, and high throughput. You can get your custom NFT Marketplace on Cardano. Using Cardano, you can develop NFT Marketplace with advanced technologies and integrations of third parties matching the market trends.
dApp Development
Decentralized applications (dApps) are one of the real-world applications of Cardano blockchain. Cardano has various categories of dApps like DeFi, voting, identity management, games, etc. Cardano dApps are powered by the Cardano smart contracts, which has robust codes written in Haskell. These dApps have a user-interactive interface with Cardano blockchain and execute transactions without letting in any third party.
Conclusion
Cardano blockchain offers a unique and innovative approach to blockchain technology, making it stand out from its competitors. Its focus on peer-reviewed research, high-assurance code, and functional programming languages such as Haskell provides a better level of certainty and security to its smart contracts. With its ability to operate as a trustworthy entity to transfer stakeholder assets, and its diverse range of use cases including crowdfunding, NFT marketplaces, and dApp development, Cardano blockchain is proving to be a formidable contender in the blockchain space.
