Today we have announced an exciting new partnership with the Ethiopian Government to implement a national, blockchain-based student and teacher ID and attainment recording system to digitally verify grades, remotely monitor school performance, and boost education and employment nationwide.

We’ll deliver this using our identity solution – Atala PRISM, built on Cardano, which will enable authorities to create tamper-proof records of educational performance across 3,500 schools, 5 million students, and 750,000 teachers to pinpoint the locations and causes of educational under-achievement and allocate educational resources effectively.

This will provide all students with blockchain-verified digital qualifications to reduce fraudulent university and job applications, and increase social mobility by allowing employers to verify all applicants’ grades without third-party agencies.

Tamper-proof data management

The blockchain-based national identity system is at the heart of Digital Ethiopia 2025 – the country’s Digital Transformation strategy. The government recently issued a national identity standard and the Atala PRISM blockchain ID will be the first system to issue IDs based on this standard. The strategy seeks to drive the country’s transformation through the digitalization of sectors such as agriculture, manufacturing, and tourism. As part of this, Ethiopia is also examining the wider adoption of our Atala products, which include the PRISM platform, for everything from blockchain-based ‘track-and-trace’ of smallholder agricultural supply chains to digital IDs for transport or healthcare. We are already in discussions around the use of blockchain-based digital identity for two other multi-million user applications.

Educational endeavor

The use of Cardano will allow for accurate tracking of individual grades, behavior, attendance, and educational attainment across all kindergartens, elementary schools, and general secondary schools. Teachers will also use the system to manage schedules or transfers, and report behavior or dropouts. The project could ultimately be extended to universities where degrees are also digitally verified on the Cardano blockchain, allowing employers to easily validate the authenticity of applicants' educational credentials.

The Ethiopian government is providing five million teachers and students with tablets and a dedicated internet network, giving all students instant access to their academic records. This will open up higher education and employment opportunities for the 80% of Ethiopia’s population living in rural regions. Student IDs will be paired with data from Learning Management Systems and harnessed by machine learning algorithms to drive personalized tuition, a dynamic curriculum, and data-driven policies and funding.

We have long recognized that developing countries could uniquely benefit from blockchain technology because of their lack of embedded, legacy digital systems and the fact that blockchains are lower cost than cumbersome infrastructure. Hence, we are already working with other governments on using blockchain to digitize public services, including a project with Georgia’s Ministry of Education pioneering the use of its Atala products to underpin a blockchain-based system for verifying graduate degrees. In 2019, we also ran a pioneering all-female software development training program focusing on blockchain solutions.

Our partnership announcement with the Ethiopian government is a groundbreaking first step in our mission to help drive decentralized digital transformation in Africa. Make sure to join us for our #CardanoAfrica show on the 29th of April to find out more about our wider work on the continent, including several other new partner announcements.

In our previous blog post, we discussed Alonzo ‒ our name given to the protocol upgrade that will introduce smart contract support on Cardano. Alonzo will establish the infrastructure and add tools for functional smart contract development using Plutus.

The Plutus platform provides a native smart contract language for the Cardano blockchain. To understand and become proficient in Plutus, one has to understand three concepts:

• The Extended UTXO model (EUTXO)
• Plutus Core ‒ the ‘on-chain’ part of Plutus
• The Plutus Application Framework (PAF) ‒ the ‘off-chain’ part of Plutus that enables interaction with smart contracts.

Plutus contracts consist of parts that run on the blockchain (on-chain code) and parts that run on a user’s machine (off-chain or client code). Both the on-chain and off-chain code are written in Haskell, and Plutus smart contracts are effectively Haskell programs. Off-chain code can be written using PAF and this code is then compiled by the GHC (Glasgow Haskell Compiler), whereas on-chain code (written using the Plutus Core) is compiled by the Plutus compiler.

It is crucial to understand the relationship between these Plutus concepts and native tokens functionality to see how their interaction turns the latter into a more useful and powerful feature.

The Extended UTXO model

Cardano (like Bitcoin) uses the unspent (U) transaction (TX) output (O) accounting model. In the UTXO model, a transaction has inputs and outputs, where the inputs are unspent outputs from previous transactions. As soon as an output is used as input in a transaction, it becomes spent and can never be used again. The output is specified by an address (a public key or public key hash) and a value (consisting of an ada amount and optional, additional native token amounts). An output’s address determines which transactions are allowed to ‘unlock’ the output and use it as an input. A transaction must be signed by the owner of the private key corresponding to the address. Think of an address as a ‘lock’ that can only be ‘unlocked’ by the right ‘key’ ‒ the correct signature.

The EUTXO model extends this model in two directions:

1. It generalizes the concept of ‘address’ by using the lock-and-key analogy. Instead of restricting locks to public keys and keys to signatures, addresses in the EUTXO model can contain arbitrary logic in the form of scripts. For example, when a node validates a transaction, the node determines whether or not the transaction is allowed to use a certain output as an input. The transaction will look up the script provided by the output's address and will execute the script if the transaction can use the output as an input.
2. The second difference between UTXO and EUTXO is that outputs can carry (almost) arbitrary data in addition to an address and value. This makes scripts much more powerful by allowing them to carry state.

When validating an address, the script will access the data being carried by the output, the transaction being validated, and some additional pieces of data called redeemers, which the transaction provides for every input. By looking up all this information, the script has enough context to give a ‘yes’ or ‘no’ answer in what can be highly complex situations and use cases.

To summarize, EUTXO extends the UTXO model by allowing output addresses to contain complex logic to decide which transactions can unlock them, and by adding custom data to all outputs.

The EUTXO model offers unique advantages over other accounting models. The success or failure of transaction validation depends only on the transaction itself and its inputs, and not on anything else on the blockchain. As a consequence, the validity of a transaction can be checked off-chain, before the transaction is sent to the blockchain. A transaction can still fail if some other transaction concurrently consumes an input that the transaction is expecting, but if all inputs are still present, the transaction is guaranteed to succeed.

This contrasts with an account-based model (as used by Ethereum), where a transaction can fail in mid-script execution. This can never happen in EUTXO. Also, transaction execution costs can be determined off-chain before transmission – another feature impossible on Ethereum.

Finally, because of the ‘local’ nature of transaction validation, a high degree of parallelism is possible: a node could, in principle, validate transactions in parallel, if those transactions do not try to consume the same input. This is great both for efficiency and for reasoning, simplifying the analysis of possible outcomes, and proving that ‘nothing bad’ can happen. You can dive deeper into the EUTXO model in the previous blog post.

Plutus Core

To implement the EUTXO model, it is necessary to clearly define the terms script and data. Scripts require a definite, well-specified scripting language, and it is also important to define the type of data that is attached to outputs and used as redeemers.

This is where Plutus Core comes in. Plutus Core is the scripting language used by Cardano. It is a simple functional language similar to Haskell, and a large subset of Haskell can be used to write Plutus Core scripts. As a contract author you don’t write any Plutus Core. All Plutus Core programs are generated by a Haskell compiler plugin.

These scripts will be executed by nodes during transaction validation ‘live’ on the chain. They will either lock UTXOs in the form of validator scripts or as minting policies, which control the minting and burning of native tokens (see below).

Redeemer data is a simple (algebraic) data type that can be defined easily in Haskell, which is another reason why Haskell is a good option for writing Plutus Core scripts. In practice, a smart contract developer will write validator scripts in Haskell, which will then be automatically compiled into Plutus Core.

Appropriate Haskell libraries simplify writing such validation logic by providing core data types for the inspection of transactions during validation, and by offering many helper functions and higher level abstractions, allowing contract authors to concentrate on the business logic and not have to worry about too many low-level details.

The Plutus Application Framework (PAF)

The on-chain state of validator scripts can only be modified by transactions that spend and produce script output. When writing a Plutus application, we need to consider not only the on-chain part of the application (the Plutus Core scripts) but also the off-chain part that builds and submits transactions.

The off-chain code is written in Haskell, just like the on-chain code. That way we only need to write the business logic once. Then we can use it in the validator script and in the code that builds the transactions that run the validator script.

Many applications need to watch the UTXO set for changes to particular addresses, so if we write our contract as a state machine, we need to track the unspent output that represents the current state of the machine and update our local state when the on-chain state changes. Likewise, many apps need to communicate with the wallet backend to access the crypto currency that they are using for transactions.

The PAF provides easy access to services that are commonly used by Plutus applications. Applications deployed using the framework’s libraries can be run on the Plutus application backend, which provides runtime support for access to the blockchain and other concerns such as persistence, logging, and monitoring. Applications written on top of the PAF automatically provide an HTTP and WebSocket interface that can be used to interact with the application from the web browser.

Native tokens

Native tokens became available on Cardano with February’s Mary hard fork. Any user can create their own tokens, and tokens can be sent and received freely, just like ada. Each native token comes with its own minting policy, which determines the conditions under which tokens can be minted and burnt.

At the moment, these minting policies consist of combinations of simple rules specifying signatures and timelocks. For example, a policy can state that only transactions that are signed by two out of five possible signatures are allowed to mint or burn tokens. Another policy can allow minting only before or after a specific time slot.

Powerful as these basic building blocks are, they do not cover every conceivable use. It is, for example, possible, but awkward, to model non-fungible tokens (NFTs) using such simple policies. This could be done using a timelock to mint an NFT, by limiting the minting operation to a specific time point. If only one token is minted before that time point is reached, the token is technically non-fungible (because there is only one). But to check this, it is not enough to simply check the minting policy. We’d need to look at the minting history of the token to ensure it had, indeed, only been minted once.

With the deployment of Plutus, users will be able to write minting policies using Plutus core. During minting or burning, the Plutus Core policy script will be executed in the context of the minting or burning transaction, and the script will have to approve or forbid the action. This will further accelerate the growth of NFTs on Cardano by enabling the creation of much more complex minting policies, and allowing the creation of NFTs in a trustless manner.

Alonzo is being gradually deployed to the mainnet via several testnets, so our partners and Plutus pioneers will be able to test Plutus Core by writing applications on Cardano throughout May and June prior to a code freeze. This will also be the period of quality assurance and user acceptance testing by exchanges to ensure that the platform is fully ready at the time of the Alonzo mainnet upgrade. If you are a developer and want to learn more about Plutus, consider joining a future pioneer cohort. Alternatively, take a look at Plutus GitHub repositories, and engage in the discussions about Plutus at Cardano Forum.

I’d like to acknowledge Jann Müller for additional input and contribution to this blog post.

At the start of March, we implemented Mary ‒ a multi-asset protocol upgrade that allows users to create unique tokens for transactions on Cardano. With the introduction of transaction metadata, then token-locking with Allegra in December, and native token creation, we are laying the foundation to establish Cardano as the leading smart contract platform.

Alonzo, our next protocol upgrade, will build on these capabilities. Implemented using our hard fork combinator technology, Alonzo will add support for smart contracts – digital agreements – to Cardano about four months from now. It will open up opportunities for businesses and developers, by allowing the creation of smart contracts and decentralized applications (DApps) for decentralized finance (DeFi).

When it came to naming these upgrades, we chose Allegra (Lord Byron's daughter) for token-locking, and Mary (the novelist and wife of Shelley) for multi-asset support. Alonzo comes from a more contemporary figure, Alonzo Church (1903-95). Church was a US mathematician and logician who worked on logic and the foundations of theoretical computer science. He is also known for inventing lambda calculus ‒ a formal system used to prove the unsolvability of the Entscheidungsproblem. Later, while working with fellow mathematician Alan Turing, they discovered that the lambda calculus and the Turing machine were equal in capabilities, demonstrating various mechanical processes for computations. One of the reasons for naming our smart contract upgrade after Church is that Plutus Core (the Cardano smart contract language) is a variation of lambda calculus.

Why smart contracts?

Smart contracts mark the next phase in Cardano's evolution as a worldwide distributed ledger. When supporting everyday business, a blockchain must guarantee that individuals can move their funds and pay for products in a secure way.

Smart contracts can be used to settle complex deals, hold funds in escrow, and secure movement of funds under predefined conditions. Cardano will allow DApps to interact with the ledger to record their activities and execute smart contracts. These digital agreements express the story of a transaction, specify where funds should go, and under what conditions they will be sent, executing a deal only when all the conditions are met. Alonzo will lay the foundation for Cardano to support such applications.

Addressing business needs with Alonzo

While multi-asset support allows users to create unique currencies that fuel business needs, Alonzo introduces a versatile platform for building smart contracts. It will be possible to work with collectibles, crowdfunding, or auctions, for example.

Areas of exploration might include the deployment of escrow-based decentralized cryptocurrency exchanges (DEX), or the creation of complex applications supporting centralized stablecoins (track-and-trace applications for product provenance within a supply chain, for example). With token-locking, users will be able to issue utility tokens with vesting periods, meaning that a number of tokens can be locked or frozen to be released after a specific time.

The scripting power of Plutus Core

With Alonzo, we are adding the necessary tools and the infrastructure to allow application development using the Plutus Platform.

Applying a rigorous approach based on formal methods and verification, Alonzo extends the basic multi-signature scripting language (multisig) used in Cardano Shelley. Multisig will be upgraded to the Plutus Core language for more powerful and secure scripting options. The Alonzo ledger implements the extended unspent transaction output (EUTXO) accounting model, using Plutus Core to provide powerful scripting.

A smart contract platform must be both secure and reliable. That’s why we chose Haskell as the basis for writing Plutus Core smart contracts. Haskell is a high-level language that developers will use to write code and then compile it to Plutus Core.

Haskell has been around since 1987, standing out from other programming languages for its high level of trust. Writing in Haskell ensures that smart contracts are programmed to do exactly what they are expected to and can be tested for accuracy before implementation. This means that smart contracts built on Cardano will be straightforward and resistant to vulnerabilities, which is crucial for applications that handle automated trading or move large funds around.

Tools and APIs

Developers will have functional tools to experiment with and customize transaction validation on Cardano. The API library will be extended to enable the deployment and operation of the Plutus Core code on Cardano while interacting with wallets and the ledger.

Deploying Alonzo is a complex process. Once functional smart contracts are running on the mainnet, we will continue improving the off-chain infrastructure to deliver software development kits.

Where are we right now?

Figure 1. Alonzo roadmap. The code will be frozen for four weeks before release

Throughout March and April, the IO Global team has been gradually combining the Alonzo rules with the Cardano node and ledger code. When Alonzo integration with the node is complete, Cardano will provide working API tools and command line interface (CLI) support.

From mid-April into early May, the team will continue working on Plutus development to launch a private testnet. During this phase, our partners (advanced developers) will be testing out the platform, creating and deploying non-fungible tokens (NFTs), marketplaces, or DApps running smart contracts on Cardano. This process will focus on step-by-step improvements to ensure that everything works efficiently.

In May, we’ll start working with our Plutus pioneers. These certified program trainees will continue testing the platform by writing Plutus applications and putting them into production for DApps and DeFi. During this phase, the team will be performing the ledger, node, and wallet backend integration. We will also be preparing and releasing documentation, including specification examples and developer guides.

May and June will be a time for quality assurance and testing with users, which will be followed by a feature freeze lasting for four weeks. This will provide crypto exchanges and wallets with the time to upgrade and prepare for the Alonzo protocol update. We expect the Alonzo upgrade (hard fork) to happen in late summer, and we will announce a firm date in April’s Cardano360 show.

For a more detailed roadmap, check out the March Cardano360 presentation by Charles Hoskinson.

These are exciting times and we encourage you to stay tuned. The next blog post will delve into the relationship between the Plutus concepts that underpin Alonzo development. Meanwhile, the developers’ website has more about programming with Plutus, Marlowe, and Glow.

The decentralization of Cardano puts responsibility for running the blockchain in the hands of stake pools. An essential element in this is reliable and effective connections between all the distributed nodes, and ensuring that the network is resilient to failure.

With the simpler Byron version of the blockchain, federated (OBFT) nodes controlled by the Cardano Foundation, Emurgo, and IOHK were wholly responsible for managing block production and network connections. This maintained the network, while building up a system of thousands of distributed nodes, operated by stake pools. To achieve decentralization, Cardano has now ended the prevalence of the federated nodes that have supported the system since its creation in 2017.

On December 6, 2020, we set the k parameter to 500 to expand the number of ‘viable’ pools and further promote decentralization. We have also gradually reduced d to put the power of block production entirely into the hands of the community. 100% of blocks are now being produced by the stake pool operator (SPO) community, which means that block production in Cardano is completely decentralized. These parameter changes support long-term chain sustainability and encourage the spreading of stake and potential rewards more evenly among stake pools.

In just over six months, we have evolved from a system reliant upon a handful of federated nodes, into a proof-of-stake system run by the community, with thousands of blocks produced every epoch by over 2,000 stake pools.

The network

Cardano’s networking layer is a physical infrastructure that combines nodes and their interaction into a unified system. The network distributes information about transactions and block creation among all active nodes. In this way, the system validates and adds blocks to the chain and verifies transactions. Thus, a distributed network of nodes must keep communication delays to a minimum, and be resilient enough to cope with failures, capacity constraints, or hackers.

Under the old federated system, nodes were connected by a static configuration defined in a topology file. Since the introduction of Shelley, the system has been functioning in a hybrid mode, where nodes connect to federated relays and to other SPO’s relays. This connectivity is partially manually constructed, however, SPOs can exchange block and transaction information without relying on federated nodes.

In his article 'Cardano’s path to decentralization', Marcin Szamotulski discussed the network’s design and explained Cardano’s approach to network decentralization with the advent of Shelley. Now that we have reached full decentralization in terms of block production, it is also essential that the network connectivity is decentralized too. Cardano will achieve this through a shift to peer-to-peer (P2P) connectivity.

P2P networking

At this point, we should talk about the network ‘stack’, a set of software tools recently enhanced by our engineering team to cope with a larger, more dynamic, and complex network.

P2P communication will enhance the flow of information between nodes, thus reducing (and ultimately removing) the network’s reliance on the federated nodes, and enabling the decentralization of Cardano. To achieve the desired resilience, IOHK’s networking team has been busy improving the network stack with advanced P2P capabilities. These improvements do not require a protocol change, but rather enable automated peer selection and communication.

The P2P networking is enabled due to the use of the following components:

Figure 1. P2P architecture

Let's take a closer look at the process of how node connections are established and see how the latest developments streamline data exchange between nodes.

Mini protocols

A set of mini protocols enables communication between nodes. Each protocol implements a basic information exchange requirement, such as informing peers of the latest block, sharing blocks, or processing transactions. Chain-sync, block-fetch, and tx-submission protocols have been used to distribute chains of blocks and transactions for node-to-node communication in the network:

• block-fetch draws information from the chain database.
• chain-sync synchronizes fetched data across the network.
• tx-submission2 consumes transactions from peer mempools and adds them to the local mempool, which enables peers to submit their transactions to the node. This is a modification of the current tx-submission protocol.

These mini protocols support the Ouroboros consensus protocol. To ensure optimal networking service, the team has implemented additional protocols:

• keep-alive: this ensures continuous connection between nodes and minimizes performance faults.
• tip-sample: this provides information about which peers offer better connectivity in terms of performance.

You can find out more about the network architecture and mini protocol examples on the Cardano documentation website.

Connection management

The networking service supports Linux, Windows, and macOS, but the number of connections supported by each operating system varies.

To avoid system overloading, a multiplexer combines several channels into a single Transmission Control Protocol (TCP) connection channel. This offers two advantages: One, bidirectional communication between peers (so any peer can initiate communication with no restrictions as both parties have read and write permissions within the same channel), and enhanced node-to-node communication without affecting performance.

The networking team has implemented a bidirectional-aware ‘connection manager’ that integrates with the P2P governor, which is currently undergoing final testing before deployment. Additionally, the multiplexer’s API has been upgraded to monitor new connections and protocols. This enhancement introduces more efficient connection management and improved issue tracking.

P2P governor functionality

The Cardano network involves multiple peer nodes. Some are more active than others, some have established connections, and some should be promoted to ensure the best system performance. As discussed in 'Cardano’s path to decentralization', peers are mapped into three categories:

• cold peers
• warm peers
• hot peers

To establish bidirectional connections between them, it is crucial that we know which connections are active.

Figure 2. Peer discovery on Cardano

The P2P governor manages connections and provides information on which peers are active and performing well. This feature promotes peer connections for enhanced system performance and also provides excellent visibility by building and maintaining a connectivity map of the entire network. The governor will simplify the process of connection definitions by handling these automatically so a few central stake pools no longer have to configure them manually. The governor promotes or demotes peers between cold, warm, and hot states, and also interacts with the connection manager to open new connections or reuse existing ones.

P2P deployment roadmap

The IOHK networking team is in the final stages of quality testing the P2P governor integration with the node. After this, the team will extend the network stack with more protocols – gossip, in particular, which will provide seamless data exchange between peers and help construct a decentralized communication map.

These technical upgrades allow us to simplify Cardano node interfaces and improve the system’s configuration. When testing is finalized, all SPOs will be able to update and simplify their configuration preferences for enhanced connectivity.

This involves the following stages before full P2P deployment:

Figure 3. P2P deployment roadmap

For a walkthrough of the plan from chief architect Duncan Coutts, check out this video from the March Cardano360 show.

While governance played an important role in the network establishment, maintenance and support, only with decentralization we can achieve true network sustainability to ensure equal opportunities for all stake pools. Thus, the goal of stack improvements is to allow all stake pools to run the same configurations, establishing equal capabilities within a decentralized environment.

We’ll keep providing more development updates in this blog, and you can also follow Cardano status updates to learn about recent improvements and developments.

As we celebrated in yesterday’s blog about D=0 day, block production is now 100% in the hands of the Cardano stake pool operator (SPO) community. Community pools are the lifeblood of the network. And earlier this year we confirmed our commitment to a vibrant proof-of-stake (PoS) ecosystem when we delegated over 300M ada to our first cohort of community stake pools.

The number of pools now stands at over 2,000 – responsible for nearly three-quarters of the ada in circulation. Their efforts sustain the network and greatly contribute to the success and recognition of the Ouroboros protocol, setting a clear standard for any competing PoS protocol.

At the start of the year, we committed to making fresh delegations quarterly to help bootstrapping community pools. Running a successful small pool is hard, and needs to be entered into like any other business endeavour, with fixed and variable costs planned, hours needed to operate, reach break even point, plan marketing approach, etc. With each delegation round, our goal is to delegate enough ada to every SPO that they can create blocks, giving them a certain level of financial security while they look to grow their delegation base.

We’re again asking every operator out there to seek delegation from IOHK’s ada funds. We’ve already done a survey of the existing pools to guide our progress, and now we want every pool to fill in our survey to apply. Besides supporting your own application, your answers will help us shape our community delegation approach based on factors such as potential impact and each stake pool’s goals.

We favour operators running single pools, and we ask for details in support of each application. We are also looking for pools with a clear sense of mission or purpose – pool operators need to be in it for more than just the ada. We also look for an ability to ‘market’ – whether it’s through content creation, clear articulation of mission etc. Evidence of technical commitment to supporting the Cardano system is also likely to influence our decisions, so a clear statement of your pool’s goals and motivation is vital. You may have created educational content; have strong environmental credentials; or run the pool to raise funds for charitable works – tell us about it and provide evidence of your successes. For ease of reference, here’s an outline of what we’ll ask you in the application form.

• Your name
• The region and country your pool is located in
• Your pool ticker
• When you established your pool
• Details of any SPO group or guild affiliation (e.g., SPOCRA, Guild, SPA etc.)
• Details of your web presence, Twitter handle, Telegram, YouTube, etc. so we can better understand how you market your pool
• Number of pools (we favor operators running single pool)
• Your mission statement and the goals of your pool
• Whether you or your Stake Pool have created educational content that is publicly available and the language it is in
• Links to evidence of that content and any successes
• If you host a meetup, what the results have been
• Your pool’s environmental credentials (carbon offset/renewables etc.)
• Whether your stake pool is a charity or runs on behalf of a charity, non-profit, or non-governmental organization, with details
• If your stake pool has ever been bootstrapped or compensated by another organization, including - but not limited to - the Cardano Foundation or EMURGO
• Details of any contribution that you have made to the community or ecosystem not mentioned above that support your application for the delegation (e.g., running a pool on the ITN, technical contribution, GitHub PRs, CIPs, content/marketing contribution etc...)

To apply, you can access the typeform here.

While we ask all SPOs applying to warrant that the information they have supplied is truthful and accurate, we do not ‘police’ pool activity or forensically examine claims for accuracy. We do however expect transparency from every member of the community.

Stake pools can apply for delegation from today; applications will close for this cohort at midnight UTC on Thursday 15th April. We will then review all the applications and announce which SPOs will receive delegation, which will be made in early May. We look forward to your applications.