Cardano is a blockchain that has gained a reputation as an “Ethereum killer” due to its ability to solve many of the problems Ethereum has encountered, such as high gas fees, low scalability, and speed and throughput. slow transactions. Since September 2021, Cardano has been creating smart contracts with its Alonzo Hard Fork implementation. This allowed it to directly compete with Ethereum. Cardano also integrates Plutus scripts, which improve its functionality and make it user-friendly for all users. Before discussing Cardano smart contracts and how they work, it is important to understand the basics of smart contracts and Cardano. Let’s start!

Why choose the Cardano blockchain?

Cardano is often referred to as the “Ethereum killer” as it aims to improve Ethereum in several ways. One of the main differences between the two is how they handle transactions and smart contracts. While Ethereum runs both on the same layer, Cardano separates them into two distinct layers: the Cardano compute layer for creating smart contracts and the Cardano settlement layer (CSL) for ADA transfers. This separation makes Cardano more efficient and scalable.

Cardano is also a proof-of-stake blockchain. Instead of mining tokens, users validate blocks by staking the native token, making the blockchain more energy-efficient, cost-effective, and scalable. In contrast, Ethereum is a proof-of-work blockchain that plans to transition to proof-of-stake in September 2022 with “the merger.”

Cardano’s blockchain development is supported by a research-based framework that incorporates peer-reviewed insights and evidence-based methods. This foundation has helped her make significant strides towards the future of the blockchain network and the Ada token. Now that we have a basic understanding of Cardano and its differences from Ethereum, let’s take a look at the specifics of Cardano’s smart contracts.

What are smart contracts?

Smart contracts are self-executing code written by developers to automatically enforce the terms of an agreement when certain conditions are met. They facilitate transactions between buyers and sellers without the need for intermediaries or third parties, which adds transparency to the process.

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The code itself controls the execution of smart contracts, and transactions are traceable and irreversible. They operate without the need for a central authority, legal system or external enforcement mechanisms.

What are Cardano smart contracts?

Cardano smart contractsalso known as ADA smart contracts, are similar to Ethereum contracts in that they are virtual agreements between two or more parties that automatically execute once certain conditions are met.

ADA smart contracts are free of middlemen and can execute faster than traditional contracts. They are also stored on a decentralized network, which makes them permanent and resistant to tampering.

Programming languages ​​for developing Cardano smart contracts

Three programming languages ​​are used to create Cardano smart contracts: Marlowe, Plutus and Haskell. Here is more information about each of these languages:

  • Marlow: This language is specifically designed to create blockchain applications focused on financial transactions. It offers enhanced security, termination guarantee, and correct behavior. Marlowe also enables smart contracts to have a set duration, set duration and preserve value.
  • Plutus: This language is used to develop applications that can interact with the Cardano blockchain. Plutus is the language behind building secure applications, acquiring new assets, and building smart contracts. It also allows developers to create smart contracts and new tokens in a minimal environment.
  • Shine: This language is used to create decentralized applications (dApps) on the blockchain. It enables developers to code secure dApps, ensuring that smart contracts work securely in an adversarial environment.

There are eight steps involved in creating a smart contract on the Cardano blockchain: Pay, Close, Values, Observations, Actions, Oracles, If, When, Let, and Assert. Here is more information about each of these steps:

  • To pay: This step consists of transferring a specific token value from the beneficiary’s account to another account in the contract. If there are insufficient funds in the account, a partial payment will be made after a warning.
  • Close: This step specifies the cancellation or termination of the contract. The closing function allows the reimbursement of accounts with a positive balance. The process is repeated for each account, but all accounts are refunded in one transaction.
  • Values, observations and actions: Actions are events that occur during the execution phase of the contract. They can be anything from deposits of money to finding an oracle value. Values ​​are numbers that change over time, such as slot numbers or balances. Observations are Boolean values ​​obtained by comparing values ​​and merging them using Boolean operators.
  • Oracle: Oracles are a feature specifically for developers using Marlowe on the Cardano blockchain. They are modeled as decisions made by a participant with a specialized Oracle role, “Kraken”.
  • Whether: The If obs cont1 cont2 function is executed when the condition is true and continues as cont1 or cont2, depending on the boolean value of the observation obs.
  • When: It is a contract that is triggered by events that may or may not occur at any time. It describes what happens after specific actions occur.
  • Let: The let id Val cont function allows the contract to name a value with an identifier. After evaluating the value of the expression, the function saves the name with the identifier id. This technique allows developers to capture and retain volatile data and use abbreviations such as the current slot number at a specific point in contract execution for later use in contract execution.
  • To affirm: The last step ensures that the property is valid at each stage of the smart contract. If the execution results in a false assertion, the static analysis will fail.

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These are the eight steps involved in developing a Cardano smart contract. Cardano is increasingly in competition with other smart contract platforms like Ethereum. Before we wrap up, let’s take a look at some of the interesting use cases for Cardano.


Smart contracts have the potential to have a significant impact on the financial world, and Cardano’s smart contracts offer a digital platform for modeling and executing real contracts. When deployed on the Cardano blockchain, these contracts provide full transparency to all parties involved and are self-executing according to the defined requirements of the contract. In Cardano blockchain developmentdevelopers can use the Plutus platform to create secure ways to transfer value and deliver services to a global audience.

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