IOHK, the company behind Cardano, has entered into a partnership with Nervos, a multi-asset blockchain network based in China. The two have jointly launched a research initiative around UTXO ledgers and smart contracts that’s set to create a secure and scalable alternative to Ethereum’s account model.
IOHK and Nervos announce an unlikely PoW/PoS partnership
Nervos, one of the largest open-source blockchain projects in China, has announced that it has entered into a partnership with IOHK, the company behind the Cardano blockchain. According to the company’s press release, the goal of the partnership is to reduce the security risks that smart contracts present to the DeFi space.
The two companies are set to roll out their collaboration in phases, with the first phase of the partnership being the launch of a joint research effort around UTXo ledgers and smart contracts. A dedicated team will be tasked with developing an improved framework for other UTXO-based blockchains in order to create a scalable and more secure alternative to Ethereum’s current account model.
Roman Pellering, the chief technical officer at IOHK, said that despite taking up different approaches to blockchain technology, both Cardano and Nervos are focused on similar things—robust smart contract technologies, native token standards, cross-chain asset transfers, and novel crypto primitives.
“It may be surprising to see proof-of-work and proof-of-stake initiatives join forces, but we believe that our industry must collaborate more if we want blockchain technologies to be adopted widely,” he said in the release.
Strengthening the foundation for all UTXO-based blockchains
The recent DeFi surge has revealed any of the vulnerabilities and issues found in smart contracts. Nervos said that it entered into the partnership with Cardano in order to advocate for the UTXO model, which they believe will create a more secure and sustainable infrastructure for digital assets.
Unlike the account model used by Ethereum, which keeps track of the balance of a user’s account as a global state, a UTXO model keeps a receipt-like track of a user’s unspent transactions across all their accounts. This makes it easier to authenticate transaction sequences and prevent double-spending while making the entire blockchain more secure.
Kevin Wang, the co-founder of Nervos, said that working on UTXO standards will provide a secure alternative not just for Cardano and Nervos, but for the entire blockchain industry.
“UTXOs are superior to account models in many ways and provide improved security, privacy, and scalability, all of which are critical for DeFi,” he explained.
Nervos and IOHK will co-author research papers on the topic and explore the creation of a universal standard for UTXO models. All of the improvements the companies make in the future will be made open-source.