crypto-catalyst

[crypto-catalyst]

Cardano Congestion and Layer 1 Improvement

With the addition of smart contracts, Cardano's blockchain has developed considerably over time. The developers behind the blockchain advocated for a "slow and steady" transition strategy, which helped with a smooth and successful rollout. While it might not be the most popular infrastructure, the Cardono ecosystem depicts a wide range of real-world application cases.

Unfortunately, the Cardano has been facing some congestion issues that can delay transactions. While this is a positive sign that the blockchain is seeing increasing demand, it can also be quite bothersome for users. So why is it happening? First, we need to understand how the Cardano blockchain actually works.

Cardano’s Architecture

The Cardano blockchain is made up of two levels. The first is the account value ledger, and the second is the rationale for value transfers from one account to another.

The Cardano Settlement Layer (CSL) serves as the account ledger or balance ledger. This is a concept that was developed as a way to improve on the bitcoin blockchain. To produce new blocks and confirm transactions, it leverages a proof-of-stake consensus mechanism.

The Cardano Computation Layer (CCL) is where data about how values are moved is stored. Users of the CCL can implement customized rules for analyzing transactions because the computation layer is not tied to the balance ledger. The launch of SundaeSwap, Cardano's first Automated Market Maker (AMM) Decentralized Exchange Protocol(DEX), was a big milestone in the blockchain’s long roadmap. SundaeSwap is a token staking and decentralized exchange (DEX) platform. It allowed its users and investors to swap tokens and raise liquidity without limitations. However, a few minutes after the launch, users started complaining about failed transactions on the platform as a result of network congestion. So what’s exactly going on?

What is Congestion?

Congestion on a blockchain happens when the demand for blockchain transactions surpasses the capacity of the blockchain. There is usually a limit to the number of transactions that may be recorded in each block. When the number of transactions reaches this threshold, the transaction initiators have two alternatives. The first alternative is to pay extra for the transaction fee. The transaction's priority will be raised as a result of this fee. Because the danger of front-running increases the cost of waiting, blockchain users have an incentive to pay a fee. Nevertheless, paying this fee does not ensure that the transaction will be included in the following block and thus approved.

By paying even more significant fees, transaction initiators could boost their transaction priority even further. It is important to note that the total value of connected fees has no effect on the transaction limit per block. As a result, even if everyone who needs to initiate a transaction decides to pay the exorbitant costs, the congestion will persist.

The second alternative involves allowing additional time for the transaction to process without paying any extra fees. Even though the prospect of waiting incentivizes an individual user to pay extra in the hopes of speeding up the transaction, the user may choose to forego the fee in order to prevent other users from paying even larger fees.

Congestion should not be mistaken for a Denial of Service attack (DoS). A Denial-of-Service (DoS) attack is one that attempts to bring a system or network to a halt, rendering it unreachable to its intended users. DoS attacks work by bombarding the target network with traffic or sending a barrage of information that causes it to crash. The DoS attack deprives genuine users like members, account holders, or workers of the resources or services they expected in both cases.

How Cardano Plans to Avoid a Repeat of the Congestion

Stability Cardano is designed to be extremely stable and secure despite network outages as a proof-of-stake blockchain. Cardano is meant to provide a rock-solid environment for processing millions of transactions worldwide, in a decentralized and highly scalable way, thanks to the Ouroboros consensus algorithm, built-in Haskell which utilizes formal techniques, as well as peer-reviewed research studies.

Adaptability Cardano is designed to be adaptable. It is meant to enhance throughput while allowing for increased demand response. As the network expands, protocol parameters are fine-tuned to account for pricing swings, as well as to improve scalability and throughput. Cardano blocks are used about 25% of the time on average throughout a given epoch, indicating that the network is not overburdened and that there is sufficient spare capacity to execute even more transactions.

The Cardano network's average blockchain load is currently hovering at 93.19 percent, meaning that 93.19 percent of its blocks are full. In comparison, on New Year's Eve, the measure was only 32.49 percent. The number of ADA wallets on the market is also approaching 3 million.

Increased Network Capacity To eliminate the possibility of any future network congestions, a subsequent parameter upgrade has been recommended in order to boost Cardano network capacity in accordance with the overall goal. This upgrade will expand the network block size by 8KB, bringing it to 80KB from 72KB. Furthermore, an upgrade proposal has been launched to raise Plutus script (Cardano’s native Smart Contract platform) memory units per transaction on the Cardano mainnet from 12.5 to 14 million, a 1.5 million increase.

These steps have been carefully adjusted to guarantee optimal network use while reducing transaction latency. Users will experience longer block adoption times if the number of blocks is raised dramatically and all at once. That's because throughput (The volume of data transferred) and timeliness (duration for block adoption) are at odds: boosting throughput means greater network performance, but it might come at the expense of higher delay when the system is overburdened.

The entire 'budget' for Timelines is set at 5 seconds (95 percent of the stake) for a block to spread across the network, with Plutus scripts having a budget of about 50 milliseconds. This is done to avoid monopolization by allowing the block to add both scripts and simple transactions.

The adjustments to block size and memory units went into effect on the 4th of February 2022, as part of a plan to expand and improve the throughput of the Cardano network. These improvements will give more resources for Plutus scripts, improving DApp user experience while also enhancing overall network capacity. This change was part of a proposed sequence of network improvements. In the year 2022, Cardano will be slowly enhanced in a series of controlled steps, deliberately and painstakingly scaling Cardano for future expansion as demand grows.

A larger block size supports a larger number of transactions per block. During situations of network congestion, there will be reduced waiting time for transactions to be accepted by a block, which is a positive. There is, however, a cost. It takes longer for larger blocks to propagate throughout the network. Nodes will also require additional time to validate transactions as a result of this.

Pipelining Another consensus layer innovation that allows for quicker block propagation on the network is called Pipelining, or more specifically, diffusion pipelining. It allows for even more headroom, allowing Cardano's efficiency and competitiveness to improve even more.

Diffusion pipelining was created with the goal of achieving quicker block propagation while preventing 'destructive' alterations to the chain. It is a solution that doesn’t change any of the protocols, primitives, or interactions that are already in use in Cardano because nodes rely on them. Instead of modifying the way things are now done, a new mini-protocol whose goal is to pre-notify subscribing entities when a new desired block is discovered, before complete validation was developed.

Scaling Scaling (increasing the system’s throughput measured in transactions per second) has also been known to alleviate network congestion. However, the Cardano protocol has a completely different scaling mechanism compared to a protocol like Ethereum. There is a wide range of different solutions to Scaling on Ethereum like Channels, Plasma - Ethereum's Native Sidechain, and Rollups.

Rollups seem to be the most preferable scaling method according to popular opinion. This led to the development of Hydra for Cardano.

Likely Issues that could Arise from Cardano Congestion Solutions

One of the fundamental assumptions for network security is that new blocks must be broadcast to 95% of nodes within 5 seconds of being created. Increases in the parameters begin to deplete the budget. It's impossible to have an exponential rise in block size. Furthermore, even without smart contracts, experts perceive transaction amounts to be excessive.

Critics even argue that the upgrades will be ineffective because the present increase in block size is minimal in contrast to Ethereum. (Ethereum sizes range from 72 to 80 kbs). Comparing the architecture of Ethereum and Cardano is like comparing apples to oranges.

Although increasing the block size might improve network speed, such adjustments should be done with caution. The settings will be progressively tweaked and the outcomes will be monitored during high saturation times to guarantee that the increase does not impact block adoption time. This is not a one-time update, but rather an iterative process that offers clear findings and assists in achieving the most efficient outcomes possible.

References:

Basho Era

Cardano Improvement Proposals (CIPs)

Cardano block size just increased by a further 8KB

Original article: https://crypto-catalyst.com/blog/cardano-congestion-and-layer-1-improvement/

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[crypto-catalyst]

MuesliSwap takes the title of the first DEX on Cardano mainnet Blockchain

Since the launch of Cardano Smart Contracts on September 12th, 2021, one of the biggest crypto community was waiting impatiently for projects such as Sundaeswap, Ardana, etc... to launch and reverse the market from bearish to bullish, and give those dreamers the Lamborghini they are waiting for, at the same time finally proving to the wold and the critics out there that the IOHK slow way to do things is the best way!

However due to the FUD and critics surrounding cardano, because simply no DEX or DEFI project is released in the mainnet after the release of smart contract functionalities, or thought so by many. Specially due to the concurrency issues faced by few projects like Sundaeswap, few wrote relatively massive blogs in attempt to explain to the average reader how Cardano screw it up and how we will try to solve it.

concurrency: Ability of different parts or units of a program, algorithm, or problem to be executed out-of-order or in partial order, without affecting the final outcome. ref

MuesliSwap

One project, MuesliSwap, went under the radar and it didn’t get the same hype as Sundaeswap. Top Youtube influencers didn’t talk about it or missed it at the beginning, although it’s released on the mainnet on November 26th 2021, where their MILK token was less than 0.5 ADA.

MuesliSwap chose to be anonymous at the beginning, and dedicate most of the time to develop the product, but this is not the reason they went unnoticed, but rather their choice to use a traditional order book model for their DEX, which is based on single UTXO transaction, (more or less the same way most of cardano NFTs marketplaces are implemented), and not going with the fancy AMM model where apparently concurrency issues arise.

AMM (Automated market maker) is an automated way of matching a buyer with a seller and vice versa by provide liquidity in exchange for share of transactions fees and free tokens, usually this intermediate processes involved in crypto trading done by centralized exchanges. AMM is model which removes the need of the exchange role and the result is DEX (decentralize exchange)

I admire MuesliSwap’s approach using a simple way to reduce time to market. But only time will show if this strategy works, specially that now the competition is getting intense after the launch of Sundaeswap yesterday as the first AMM DEX (21 - 01 - 2022).

What is MuesliSwap?

MuesliSwap is a company based in Switzerland, Muesli is Swiss word used to describe obviously a Swiss superfood discovered over 100 years ago, and hence the name Muesli. "Swap" is the classic word in the crypto community used by most DEXs like uniswap, pancakeswap, sushiswap, you got the idea. MuesliSwap DEX is built around their token which goes with the name MILK - Milk is used to mix all the Muesli ingredients.

How it works

MuesliSwap works more or less like the traditional stock exchanges, however with a key difference that anyone can be matchmaker. Quoting from Matt, Co-Founder of MuesliSwap:

“In principle, our solution is inspired by how traditional stock exchanges work, but there is one key difference. That is, anyone can become a matchmaker on the MuesliSwap platform. And because you don’t have liquidity pools, there’s less risk of someone withdrawing liquidity and making your tokens worthless, like we see so often on Uniswap based exchanges. Our goal is to bring together the best of traditional finance and DeFi.”

So in simple words there are three basic operations that can be done on the MuesliSwap DEX.

Place order

An order is placed by sending an amount of ADA and assets to MuesliSwap script address, this simply done by:

Going to https://ada.muesliswap.com/

Download and connect https://namiwallet.io/ web browser wallet extension (don't forget send fund to your wallet)

Navigate to Markets (left menu screenshot below) page

Select the token (asset) you want to buy (ex: MILK)

Specify the amount you want to buy and how much you want to pay for a token

Here you go - you can place your order by clicking submit

Wait for your order to be filled

Only if there a seller who want to sell the token you want with the price you chose then the order is fulfilled.

Cancel order

In case there is no one wants to sell the asset with the price you want, your order won't be fulfilled, and it will be shown on "My orders" page (left menu screenshot below).

To cancel the order if don't you like to wait, you need add a collateral of 5 ADA on your Nami wallet:

Open Nami wallet usually it's in the top right

On Nami wallet clicking the big circle top right

Selecting collateral from dropdown menu

Make sure you have 5 ADA at least and type your password to confirm

Navigate to "My orders" page on MuesliSwap and cancel the order in question.

Order Match

Luckily you don't need to do anything here, this is where the smart contract is doing the smart stuff. If there is a match of your placed order, the smart contract execute the SWAP and your token should be shown on your Nami wallet. screenshot below shows the assets I bought.

If this was not enough the MuesliSwap team made the DEX as well for Smart Bitcoin Cash blockchain https://muesliswap.com/ and their smart contract code is on github https://github.com/MuesliSwapTeam.

One more thing: I confess I stumbled on the project 2 months ago, but I could not find anything about the team and I missed the opportunity to buy MILK token at less than 0.6 ADA, at the time of writing this article it's 2.93 ADA.

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Disclaimer: This post is for educational purposes only, the authors do not endorse or promote any products discussed herein.

OP: https://crypto-catalyst.com/blog/muesliswap-takes-the-title-of-the-first-dex-on-cardano-mainnet-blockchain/

[crypto-catalyst]

Think like a scammer to protect your crypto assets

Blockchain technology is revolutionizing the way we transact with each other, assets can be transferred faster, the identities of the sender and the receiver are kept hidden, and it is impossible to counterfeit or hack the transactions. Really?Scammers and hackers are not short of ideas, from fake blockchains, fake cryptocurrencies, exploiting smart contracts vulnerabilities, or even flooding the blockchain network with spam transactions and caring out 51% attacks, and more. All for the same reason retail and institutional investors are Jumping on the blockchain wagon, money.In this blog, we’ll look at one of the many ways cyber-criminals seek to profit from the cryptocurrency space by caring out phishing attack.Phishing is a form of fraud in which an attacker pose as trustworthy organization or person in email or other forms of communication. Attackers will commonly use phishing emails to distribute malicious links or attachments that can perform a variety of functions.Think like a scammer!Let’s put the scammer hat for a few minutes, and without almost any technical jargon. Let’s say we want to pull off a phishing attack to steal ADA funds, how can we do it in simple form? Why not just make the victim send us the funds himself? Is that not easy? It turn out is relatively easy.Steps :Purchase domain similar to official website https://daedaluswallet.io/ Clone the Daedalus website using tools such as https://github.com/imthaghost/goclone Download the official Daedalus wallet https://daedaluswallet.io/ Inject the official Daedalus wallet with malicious code, using tools such as Debinject in case of debian files. Put the copied website and the injected wallet on web server such as apache2 in the cloud. Craft genius email with your malicious link (Ex: Deadalus revolutionary new version!) Send the email to your victims. Once the victim download the wallet through your fake website and use it. Eureka you got the victim funds. Malicious code can be a keylogger for example or script that send funds to the scammer ADA addressReal world phishing attackCrypto scams raised more than 80% last year, last December in real world phishing attacks, scammers use Google Ads to direct victims to fake https://phantom.app/ wallet and hundreds of thousands of dollars were stolen.“Simplicity is the ultimate sophistication.” — Leonardo da Vinci.Scammers purchased a domain https://phanton.app, almost the same as the official https://phantom.app/ one, and they used Google Ads to direct as many victims as possible to their fake website wallet. Compared to our example above, they changed step 7 Email with Google Ads. The main principle of phishing attack and social engineering in general is to trick you to walk in a trap.Psychological manipulationScammers are masters in psychology manipulation, they use every trick in the book to get their targets out of their logical thinking to an emotional state where logic suddenly goes out of window.Psychological tricks

Phantom riches: enticing investors with the prospect of future wealth and promises of guaranteed income Social consensus: leading investors to believe that other savvy investors have already bought into the opportunity Reciprocity: offering to cut the commission in half in exchange for investing Scarcity: creating a false sense of urgency by claiming there is a limited supply. Last November 2021 a scammers they used the popularity of Netflix series Squid Game, and create digital token which they marketed as “play-to-earn cryptocurrency”.“Play-to-earn” cryptocurrency is where people buy tokens to use in online games and can earn more tokens which can later be exchanged for other cryptocurrencies or national currencies.This kind of scam is commonly called a “rug pull”, when the scammers draws in buyer and investors then run off with the money raised from sales.DYO — Do Your own ResearchOne of the main skills a scammers has is research. The time spent to research and prepare determine the percentage and likelihood of pulling successful attack. Likewise for users doing DYO before investing decrease

your chance to be scammed or simply investing in the wrong project.I can not emphasize enough on this point it’s often overlooked or outsourced to third parties. Many they prefer just watching one or two videos about the project and scroll through the project promotional website and they have already an opinion.From my side I prefer DYO, and how extensive I go it depends if the level of interest decrease or increase while researching the project.Sometimes DYO is not enough, and this is why my golden rule is don’t invest what you can’t afford to lose.Don’t trust — verify!Security is all about knowing who and what to trust, and that is the essence of phishing attack and social engineering attacks in general, which usually done by faking something a website, mobile application, phone number ..etc and trick victims to fall in the trap.Here are few rules I follow:General-principle, unless you 100% trust the site you are on, you should not willingly give out your card information, your crypto spending password or your crypto mnemonic or sensible data. Double-check the URL, or the application name: take few minutes and check the web address you are navigating to or the application name you are about to download from the store. Https not Http: Make sure that that url you navigating to start with https. Bookmark your favorite websites: A simple thing that I do always, which spare me time and reducing the risk of ending in fake websites. Two-factor authentication: Improve your online accounts security such as exchanges or emails, by using two factor authentication (2FA). You know this annoying code that is sent to you by SMS or through Authenticator App such as Google Authenticator App, then you need to type the code as an entra security to login. This is 2FA. > Note: Using an authenticator app to generate your Two-Factor login codes is more secure than text message File downloads: I recommend to download files only from source when you can authenticate the sender. Tools that really helpBrowser: For privacy I use brave.Brave is a free and open-source web browser based on the Chromium web browser, which Chrome is based on as well. Brave is a privacy-focused browser, which automatically blocks online advertisements and website trackers in its default settings.Ad-Blocker and anti-phishing add-ons: Install browser add-ons which alert you of phishing sites, block malicious website, blocks online advertisements. I personally use two awesome open source add-ons:PhishFort: Anti-Phishing Solutions for High Risk Industries, this is one of the best chrome addon which offers website and domain phishing protection uBlock: An efficient blocker add-on for various browsers. Fast, potent, and lean. I think the key takeaway from this article is to avoid doing this one mistake, the one that you will regret if you don’t take simple steps and precautions to protect your crypto funds and your privacy in general.

Original article: https://crypto-catalyst.com/blog/think-like-a-scammer-to-protect-your-crypto-assets/ > If you wish to help us, you can delegate to Crypto Catalyst Cardano Pool CCYT

References:What is social engineering?Rug pull attackSecurity tipsScammers used google ads to steal 500kSquid Game crypto token collapses in apparent scam

Disclaimer: This post is for educational purposes only, the authors do not endorse or promote any products discussed herein.