Key conclusions
- The Cardano network successfully activated the Van Ross hard fork, implementing its first large-scale upgrade managed entirely on the blockchain.
- The new Protocol 11 reduces the cost of running Plutus smart contracts and blocks the ability for staking pools to use the same VRF keys multiple times.
- Wallets holding between 100,000 and 100 million ADA increased their balances to the highest level since 2023, controlling over 25% of the supply.
Technical improvements to the Cardano network
The implementation was based on five improvement proposals (CIP). The CIP-133 standard introduces BLS12-381 multiscale multiplication (advanced mathematical calculations), which allows for simultaneous verification of thousands of signatures. This feature makes it easier for teams developing zero-knowledge proofs and multi-signature wallets by eliminating the need to perform these operations off-chain.
Modifications aimed at data throughput have also been introduced. The CIP-138 proposal adds a native array type for on-chain data (a simpler way of arranging information), and CIP-153 changes the multi-asset value handling scheme, i.e. handling many different tokens at the same time. In turn, CIP-132 speeds up list processing through a function dropList (faster removal of unnecessary elements from data queues), and CIP-109 implements modular exponentiation as a built-in operation (basic mathematical operation stored directly in the system), which reduces the costs of Plutus script execution.
Network security has improved thanks to new restrictions imposed on node operators. Staking pools have lost the ability to reuse the same verifiable randomness key (VRF) across the network structure. The change forces a unique key to be assigned to each pool’s identity, closing a potential attack path. The Intersect MBO organization informs that the verification of the readiness of exchanges and staking pools showed a high level of commitment before the epoch limit, i.e. the moment of the network’s transition to the new system. The implementation was approved by delegated community representatives, casting 77.63% of votes in support of the required threshold of 60%. Staking pool operators supported the proposal with a vote of 52.7%, exceeding the required minimum of 51%. The Constitutional Committee adopted the document by a vote of 6-0-0-1. Voting closed on July 13.
Investor reaction and ADA rate
ADA’s market valuation immediately after the split was USD 0.16462, down 0.88% over the day. The daily trading volume decreased by 54.81% to USD 179.93 million. However, Santiment’s analytical data shows strong accumulation by large investors. Addresses holding between 100,000 and 100 million ADA have accumulated the most tokens since 2023, taking control of over a quarter of assets in circulation. Smallholders reduced their involvement in the same period.
ADA is holding below the 200-day simple moving average of $0.25601. The technical support zone is located in the Fibonacci retracement area at USD 0.16185. A daily chart close below this border opens room for declines towards USD 0.15. On Sunday at 9:45 a.m. EDT, ADA was trading between $0.1651 and $0.17.
A new consensus mechanism and the future of the Cardano network
The current changes constitute the foundation for the implementation of the Ouroboros Leios architecture. The parallelized consensus mechanism is undergoing testing and is expected to increase network throughput by 30 to 65 times. The goal is to achieve performance exceeding 1,000 transactions per second later this year. An update compatible with the new environment has already been released by the Lace wallet provider. The market is now analyzing the TVL index and the dynamics of decentralized applications to assess the real impact of cheaper Plutus contracts on developer activity.
