Cardano’s original cryptocurrency ADA price plunges after test failure in major blockchain upgrade
A failed test of Cardano’s long-awaited blockchain upgrade last week has prompted founder Charles Hoskinson to fume that his own community unwittingly committed a “self-inflicted wound”.
Its native ADA coin fell by nearly a fifth since Friday’s session, amid fears of more potential delays to improve the chain’s scalability with faster transaction speeds and throughput.
“It’s incredibly corrosive and harmful and it has to stop,” Hoskinson warned in a 24-minute video response posted on YouTube on Saturday.
The previous key member of the Cardano community broke ranks and sounded the alarm over a “catastrophic” error in a test of the new upgrade, called “Vasil”, which had already had various hiccups.
“Unfortunately, the headlines now are ‘catastrophic bug Cardano’ and that’s what’s going to stick in the minds of consumers, and it’s going to take a lot of marketing and discussion to get it resolved,” he said.
With Cardano considered a top contender for a post-Merge Ethereum, there is a lot riding on Vasil. Previous upgrades like Shelley two years ago tackled major issues like the critical lack of decentralization by introducing staking pools, while Alonzo later added smart contracts.
According to Hoskins, ADA is listed on more than 200 exchanges, over 1,000 blockchain piggybacking projects are currently under construction, and over 5 million NFTs were minted using the technology.
By drawing outside awareness of Vasil’s problem rather than sticking to off-limits internal community channels for debate and discussion, critics unwittingly jeopardized the efforts of anyone with a vested interest in the success of Cardano.
“Nothing meaningful will be accomplished,” Hoskinson said. “No real technology will be developed, no real conclusions will be drawn – you will only incite a flashmob, wild speculations and opinions, and finally sensationalist comments that will be used to damage the integrity of the project.”
Real consequences
Although he did not mention him by name, Hoskinson took aim at comments made by Adam Dean, one of his independent stake pool operators (SPOs). These are the people responsible for maintaining the viability of the Cardano network under the proof-of-stake consensus mechanism that Ethereum will adopt after the merger.
“Some SPOs decided to go and make podcasts with incredibly inflammatory titles about how catastrophic bugs prevent Cardano from updating and predictably, so the dishonest crypto media are now running articles,” he said.
In the video, Hoskinson admitted that mistakes had been made with the way the test was handled.
“There is a lot of egg on our face from (the upgrade). It’s always a crap situation when a testnet doesn’t work the way you think, and that so late in the pipeline a bug slipped through, he admitted. “I wish we had a backsies.”
But he argued that ironing out the kinks was the whole point of a network test before it goes live to the mainnet, where real blocks are produced.
“They are used to playing with things and destroying things. Ethereum has had dozens of issues with previous testnets,” he said. “And they in no way, in any way, harm Cardano itself. No funds have been lost, no keys have been hacked, no nodes have collapsed.”
Unlike Ethereum’s current Beacon chain, where network validators cannot touch ETH unlocked as part of the Proof-of-Stake consensus mechanism, Cardano has an important advantage.
Validators, the SPOs like Dean, can revoke their ADA at any time. This “liquid staking” provides extra security to users should they quickly need to convert their staked ADA into fiat currency.
Still, damaging headlines like last week’s could threaten Cardano’s future and its strategic positioning vis-a-vis Ethereum, once the crypto industry’s second-best-known blockchain after Bitcoin switches to PoS, Hoskinson fears.
“Less people will migrate to the project, less commercial interest and ultimately less adoption for Cardano,” he said. “These are the real consequences of using Reddit, Twitter, Facebook or other channels, YouTube shows, to discuss issues that frankly should be discussed with process.”
On Monday, ADA fell to as low as 44 cents each, down from about 53 cents late Thursday, according to CoinMarket Cap.
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