Wednesday, April 14, 2021
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Nervos And Cardano Will Increase The Security Of Smart Contracts By Improving The UTXO Model

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Nervos and Cardano have launched a research initiative to improve smart contracts‘ security by improving the system of unspent transaction outputs (UTXO).

Nervos and the Cardano Development Team (IOHK) will co-author research papers on improving the UTXO model and future open-source developments, exploring the possibility of creating a universal UTXO standard.

They ally with other blockchains using the UTXO model to collaborate on research, development, and education in the industry.

The utxo model tracks the unspent transaction outputs of a user across all their addresses and each transaction. According to Nervos, this is a more secure alternative to the account-based accounting method used by smart contract-based blockchains, such as Ethereum. The account-based accounting method is more vulnerable to hacks, especially for decentralized finance (Defi) protocols, because it tracks the user’s total account balance but not individual transactions.

Nervos and IOHK have adopted modified versions of the UTXO model for their blockchains. The two projects will share confidential information to improve the method.

“UTXOs outperform bill-based models in many ways and provide enhanced security, privacy, and scalability, which is critical for Defi,” said Nervos co-founder Kevin Wang.

According to the CipherTrace report, many Defi projects rely on unverified smart contracts with vulnerabilities that can be exploited by attackers. Last week, Cardano held a hard fork as part of the transition to the third primary development phase, which will focus on the functions of blockchain smart contracts. Nervos recently introduced its new sudt token standard, which will compete with the ERC-20 Ethereum standard.

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I am the editor-in-chief of The Crypto Basic. Love to get involved in cryptocurrencies. I am in crypto since 2014. I like the way blockchain is progression, being adopted by large firms and in most parts of our lives. We are early adopters and followers of blockchain, and time will surely come when our success factor will be blockchain.


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