Cardano’s development is guided by a methodical, research-based, and deliberate approach to innovation. Over five development phases, IOG introduced innovations, new functionality, and novel features, with each phase building upon the previous phase's achievements.
Chapter 4. Basho: scaling Cardano
Basho is Cardano's development theme focused on network optimization, scalability, and interoperability. With the core functionality in place, Basho is about improving the underlying performance of the Cardano network to better support growth and adoption for thousands of applications with high transaction volumes.
During Basho, IOG aims to steadily increase the capacity and throughput of the Cardano ledger by deploying new layer 1 and layer 2 solutions. These solutions include such on-chain improvements as block size increase, on-chain storage, diffusion pipelining, Plutus memory and speed enhancements, as well as an improved cost model. Off-chain solutions include Hydra Heads to maximize throughput and cost efficiency of transaction processing, and Mithril, which improves chain synchronization times for full and light node clients.
Basho is also heavily focused on interoperability using solutions like sidechains and cross-chain bridges, which enable bidirectional communication with other blockchain systems. The upcoming launch of the sidechains toolkit will allow developers to bootstrap their own sidechains to benefit from Cardano’s first-in-class security, cost efficiency, and environmentally-friendly impact. Sidechains enable value transfer between blockchains that may operate under different rules or consensus mechanisms. The result will be greater interoperability for Cardano and the ability to support new kinds of use cases on the network.
IOG together with ecosystem partners have also carried out research on the Djed stablecoin. Djed is an algorithmic stablecoin with proven price stability, which is accomplished due to the use of formal methods. Stablecoin’s algorithmic design provides enhanced security settings and eliminates price volatility. Djed is being implemented by COTI.
IOG also created a UTXO alliance by partnering with other UTXO-based blockchains to cultivate innovative solutions and advance interoperability, programmability, and scalability. The UTXO alliance facilitates cross-ecosystem initiatives to extend the capabilities of UTXO, and to foster further research, development, and education across the entire blockchain space.
Basho will see Cardano become one of the most high-performant, resilient, and flexible blockchain platforms in the industry. This will provide network infrastructure with the capability to scale in a sustainable, secure way, as well as the ability to add new functionality without compromising the reliability at the core of the network.