IOHK has announced that the first Cardano smart contract testnet is now live. The testnet, known as KEVM, is a version of an Ethereum Virtual Machine (EVM) using the K framework. It was produced by Runtime Verification and IOHK. On the testnet, developers will now be able to run EVM applications on the KEVM to test the functionality of their smart contracts.
According to Gerard Moroney, IOHK Project Manager, “this is an important first in cryptocurrency that is a necessary step towards the promise of third-generation blockchains.”
A smart contract is a self-executing agreement where terms between the buyer and seller are written into code. Through their use, trusted transactions and agreements may be executed between separate and anonymous parties without the need for a central authority, legal system or other external enforcement mechanism. In this way, transactions are both transparent and immutable. States like Ohio are looking to make smart contracts legally binding. While this may be helpful from a branding perspective, to legitimize blockchain technology and cryptocurrencies, such legislation is actually incongruent with the original purpose behind smart contracts.
A second testnet will launch for Cardano in July, dubbed IELE, as Cardano’s new virtual machine. This will be similar to LLVM, and developers will be able to develop smart contracts that take advantage of the new platform’s improved security and performance as compared to the KEVM testnet.
The K Framework– was chosen for the first testnet for a number of reasons. A programming language requires unambiguous definitions to describe what it does, known as “formal semantics.” Typically, formal semantics require a mathematical background in order to be well-understood, and as such, they be seen as useless to coders who lack such a background. The K Framework was created under the premise that an ideal language framework is possible, with formal definitions for each of its tools including interpreters, compilers, state-space explorers, model checkers, verifiers and so forth. In this way, it is designed to be user-friendly, mathematically rigorous, modular, expressive, correct-by-construction and efficient.
With this step in the evolution of Cardano, we can only expect that it will affect the price of ADA. Since the announcement, there has been a jump in trading volume, and a reversal from the low of just over 17 cents in the past week to over 20 cents according to CoinMarketCap. We are not financial advisors, and you should seek the advice of a professional if you are interested in making a major investment. However, it is clear that the outcome of smart contracts being tested on each testnet could move the price of ADA either up or down, depending on how well the tests go, and whether this translates into more adoption of the Cardano platform by developers.
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