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App or Website Development with Cardano Solutions

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Alexander Safonov
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The Cardano network will soon undergo a major update that implements a second layer of CCL, which is responsible for smart contracts, dApps, launching of new tokens and tokenization of assets. After this update, anyone will be able to use Cardano to launch their own apps, websites and other projects. Further, we will tell you about the advantages of developing on Cardano and what you need to know and do to run your project on this network.

What is Cardano

App or Website Development with Cardano Solutions

Comparison of Cardano with Bitcoin and Ethereum. Source

Cardano is a next-generation blockchain platform for smart contracts and dApps that aspires to be a faster and more scalable Ethereum analogue. It was launched in 2015 by Charles Hoskinson and Jeremy Wood. Hoskinson worked with Buterin on Ethereum, but left the project before its launch to found Input Output Hong Kong (IOHK). IOHK's mission is to launch a blockchain platform at Proof Of Stake with support of smart contracts and decentralized applications, but without scalability problems.

Hoskinson's new project is named Cardano after the eminent mathematician and engineer Gerolamo Cardano. The native token is named ADA in honor of Augusta Ada King, who is considered the first programmer in history because she created the description of the first computer and the programs for it. The use of famous scientists' names is due to the fact that Hoskinson and Wood developed Cardano based on mathematical proofs and academic research.

To do this, they, together with several other academics, created a mathematically robust model of the Ouroboros distribution platform. It is a Proof-of-stake based consensus mechanism that academically guarantees blockchain reliability and protection against attacks such as denial-of-service and transaction spam (Bitcoin and many other networks may have problems with this). A detailed description of its operation and proof of reliability is described in academic publications, which can be found in the library on the IOHK website.

Benefits of developing on Cardano

Ouroboros consensus mechanism. According to the Cardano team, the main advantage of their project is the Ouroboros consensus algorithm. It is a proven secure version of Proof-of-stake, where transactions are not checked by every node (as in Proof-of-work), but by a selected group of network participants - slot leaders. Leaders are randomly selected from the pool of candidates (ADA token holders), as in Delegated Proof of Stake (DPoS), but according to a special algorithm. This algorithm pseudo-randomly selects validators and rewards them in such a way that the system is stable, and the reliable leaders are kept happy and continue to work, while the unreliable ones are punished and blocked.

App or Website Development with Cardano Solutions

How the Ouroboros consensus algorithm works in the Cardano network. Source
Dual-tier network architecture. The second advantage of using Cardano to develop your own websites and applications is the separation of the blockchain into two related but fairly independent tiers:
  • The first tier is the Cardano Settlement Layer (CSL). It is responsible for Cardano wallets operation and transaction processing. In the future, it is planned to add ADA exchange for coins of user sidechains and other cryptocurrencies.
  • The second tier is the Cardano Computation Layer (CCL). It is responsible for the operation and calculation of smart contracts and dApps. It uses the Haskell programming language, which is considered to be one of the most advanced and secure. CCL is scheduled to launch in the second or third quarter of 2021.
This separation makes it possible to make significant changes to the blockchain without forking. In addition, it also means that errors and failures in dApps or smart contracts will not affect transaction processing in any way. And vice versa.

Interoperability. It is a feature of the Cardano network that allows multiple non-homogeneous shards and blockchains to work together. It allows the creation of smart contracts and applications that are very closely linked but remain independent. For example, Cardano proponents' websites suggest creating a management system where:

  • one blockchain will prescribe laws that will be passed by users of that blockchain directly or through delegation;
  • in another blockchain, smart contracts and applications developed on the basis of the rules that are spelled out in these laws will work;
  • and a third blockchain is used to arbitrate controversial situations.
In this way it is possible to create a technological basis for the exercise of legislative, executive and judicial authority. At the same time, each part of this system will be independent and will remain functional if the other branches are inoperable due to an update, a failure or a hacker attack.

Scalability. Thanks to Ouroboros and sidechain technology, Cardano could potentially process a trillion transactions per second. By comparison, a Bitcoin blockchain without a second tier of superstructures can process an average of about seven transactions per second, an Ethereum 2.0 blockchain from 3 to 100 thousand to transactions per second, and Visa/Mastercard payment systems up to 30 thousand transactions per second.

With this scaling potential, Cardano can be the basis for the development of any level of applications and websites - from small blogs to Amazon and Alibaba-level marketplaces. However, to unleash that potential, Cardano needs the power of a giant distributed computing network. Without that, the Cardano network is capable of processing about a few hundreds of transactions per second. That's less than a trillion, but far more than many competitors. App or Website Development with Cardano Solutions

A comparison of the current and potential speed of blockchain networks and financial systems. Source
Transparency. The Cardano development team believes that their blockchain and its management should be as transparent and decentralized as possible, so all their researches are public, the source code of the software is open, and the technical processes are audited regularly, and the results are publicly available. However, the entire Cardano ecosystem and its development is not managed by a single team, but by several organizations:
  • Cardano Foundation. A Swiss NGO whose main mission is to "standardize, develop and protect Cardano technology". The Cardano Foundation is also responsible for public relations and government regulation.
  • Input Output Hong Kong (IOHK). A Japanese development company founded by American developers Charles Hoskinson and Jeremy Wood in 2015. It is engaged in the development and maintenance of the Cardano blockchain.
  • Emurgo. A Japanese investment fund, responsible for the commercial development of the project and helping businesses with integration into the Cardano network.
Legitimacy. Another important benefit of developing apps and sites on Cardano is the project team's desire to balance the wishes of centralized authorities and the decentralized community. For example, if your app will interact with government agencies or banks, your project needs to comply with protocols such as Know Your Customer (KYC) and Anti-Money Laundering (AML). To that effect, the Cardano network has introduced the ability to add metadata to a transaction - from numerical data to written details that financial institutions may require.

In addition, Cardano management is eager to work with authorities and large financial institutions to ensure compliance with local laws and to protect users' data and money. In Cardano, they believe that this is the only way to achieve mass adoption of cryptocurrencies and decentralized blockchain-based finance in the global economy.

How to create a website or application on Cardano

Step 1: define the project concept. The process of launching your own blockchain projects based on Cardano, as with other startups, begins with defining a clear idea and concept for your project. And the more specific the understanding of what kind of product you want to create, the easier it will be for you, business analysts, designers and programmers. Therefore, before you start any development activities, you must answer the questions:
  1. Does your project match the current trends? History knows many cases when a seeming breakthrough startup has failed because it does not fit the current direction of the market. Prominent examples are 12seconds.tv (analogous to TickTock, 2008), SNOCAP (analogous to Spotify, 2008) or WebVan (online food delivery, 1999). It may seem strange, but sometimes it's better to hold on to an idea until the market is "ripe" for it.
  2. What problem does your product solve, what benefit does it bring? It's not just important in the blockchain industry. Too many startups create products that appear to be breakthrough, but actually have no real use case. Make sure your project is not one of them.
  3. What is the potential of your product (market and audience size, future demand)? Cryptocurrencies and blockchain are still very new industries. Because of this, it can be difficult to find reliable data to analyze the potential of a product. Legacy market analysis, analysis of user search activity (as well as hiring a marketing agency) can help you here.
  4. Who are your potential competitors in the market? You need to research your potential competitors and understand how you can stand out from them. What unique value proposition your project has.
  5. Who are your competitors in the legacy market? Most blockchain startups are decentralized variations of traditional finance. So before launching your project on Cardano, it is also important to understand which traditional financial organizations you will be competing with and whether you will have an advantage over them.
Step 2: definition of business goals, KPI, monetization models. If your project is created on a commercial basis, you need to calculate how much income it can bring in the short, medium and long-term perspective. This will help with planning the development budget, provide information for choosing the optimal monetization model and determining the key performance indicators.

At this stage of development, you must answer the following questions:

  1. How will your product generate revenue? It could be a model with subscription fees, transaction fees, freemium, or traditional product sales for a one-time payment.
  2. What budget is needed for project design and development? The development budget includes not only the cost of development itself, but also the cost of marketing, scaling, outside integrations, upgrades, etc.
  3. Do you have a growth springboard? Does your project have any ways to attract more users, such as the launch of a new blockchain, the failure of competitors, market or world events.
  4. What are the risks to consider? It could be a decline in interest in blockchain projects, a market downturn, high marketing costs or technical problems on the Cardano side (hacking, overloads, project closure).
Step 3: Choosing the best development company. When building startup software products (mobile apps, marketplaces, SaaS, SRM), you will surely find many development service providers with skills in C#, C ++, Python, Golang, Rust and JavaScript. But blockchain project development will also require knowledge of cryptography, smart contracts, blockchain architectures, consensus mechanisms and very often cryptocurrencies besides these skills. In addition, it is highly desirable that the technical partner has extensive experience creating software in the right niche (finance, video games, sales, etc.).

How to find such a partner is described in detail in the article: "How to choose a blockchain project development company". Here we will outline the main points:

  1. Experience, skills and knowledge. Look for blockchain developers with years of experience with this technology and many completed projects that you can test. So first look for a company with a large portfolio and good customer reviews.
  2. A comprehensive approach to development. Look for a development service provider that provides complete, comprehensive, end-to-end customized software solutions. That is, you want a development company that can help with product strategy and future integrations. It's also helpful if your partner has experience with web apps, mobile apps, and popular cloud applications.
  3. Dedicated, comprehensive team. The team that will be developing your website or application on Cardano should include multidisciplinary specialists who will deal only with your project. This improves quality and speeds up development time.
  4. Business-oriented approach. A good developer should be focused not so much on creating a software product as on achieving your business goals, i.e. the commercial success of the client.
Step 4: direct development. At this stage, frontend, backend, blockchain and mobile developers take over the business. They implement the design and functionality of your project in software code, using standard languages and development tools as well as Cardano's special solutions:
  • Plutus. A smart contract platform for Cardano based on the Haskell functional programming language. You can write smart contract code with it Plutus Playground, a lightweight web-based custom development environment. A guide on its use and API can be found on the official portal.
  • Marlowe. It is a new domain-specific language (DSL) that allows the less proficient user to create and test their own smart contracts without extensive study of Haskell, Solidity or another smart contract language. Marlowe itself is based on Haskell and Plutus. Creating contracts with it can be thought of as building with pre-built blocks.
  • Glow. Another subject-oriented language, but for the development of decentralized applications (dApps) on the Cardano blockchain.
  • KEVM devnet. Allows deployment of any smart contract on the Cardano blockchain that is written in the Solidity smart contract language (the primary language of the Ethereum network). KEVM allows developers to implement formal programming language semantics modularly in their Solidity-based dApps and deploy them on Cardano to take advantage of lower fees and enhanced Cardano functionality. KEVM supports EVM only up to Byzantium.
  • IELE devnet. This is a dedicated virtual machine that provides the foundation for the Cardano blockchain protocol. It executes and validates smart contracts, and provides developers with a user-friendly language.
Step 5: launch of the product. When a smart contract, app, and website have been rubber-stamped, they need to be deployed on the Cardano blockchain and added to various listings. So, if you create a mobile app, it needs to be added to Google Play and the App Store. If your project will have its own token, it needs to be added to the listings of cryptocurrency exchanges.

The cost of launching projects on Cardano

The budget for developing your own project on Cardano depends on its complexity and the location of the development company. For example, if you create a simple website where you will sell your arts through NFT, it will cost you from 5 to 10 thousand dollars. Whereas, the development of a full-fledged NFT exchange will cost you from 40 to 100 thousand dollars, if not more.

Here is an approximate budget for such a project:

The cost of launching projects on Cardano

Closing Word

If you are thinking about launching a website or an application on Cardano, but don't know where to start, contact our consultants. They will explain in more detail the pros and cons of developing on Cardano and answer all your questions. We have been developing various Fintech, DeFi and Blockchain projects since 2015 - from simple websites to cryptocurrency exchanges, as well as White Label for their launch. You can explore our portfolio and find out the conditions of cooperation via e-mail  sales@merehead.com or via phone number  +1-206-785-16-88.

App or Website Development with Cardano Solutions key takeaways:
  1. What is Cardano
  2. Benefits of developing on Cardano
  3. How to create a website or application on Cardano
  4. The cost of launching projects on Cardano
  5. Closing Word
Merehead does professional development of Cardano solutions. If you have questions, contact us for a free consultation.

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  Category: Blockchain 02/02/2023
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