Litecoin One Step Closer to Cardano Partnership and "Velvet Fork"
Two top-ten blockchains could team up for cross-chain compatibility.
Key Takeaways
- Litecoin is preparing to work with Cardano on a "velvet fork."
- That fork will add several features including cross-chain fund settlement, smart contracts, and improved scalability.
- It is not yet certain that Litecoin will go forward with these plans.
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Litecoin is preparing to collaborate with Cardano on cross-chain interoperability, according to a blog post from David Schwartz, Project Director at the Litecoin Foundation.
Velvet Fork Under Consideration
Schwartz says that Charles Hoskinson, creator of Cardano, invited Litecoin creator Charlie Lee to collaborate on blockchain interoperability in July.
Hoskinson originally wrote on Twitter:
@SatoshiLite it would be great to do something together. I love the idea of testing cross chain communication between Litecoin and Cardano. We got a lot of ideas and I'm sure you guys do too
— Charles Hoskinson (@IOHK_Charles) July 7, 2020
Since then, Schwartz has had several conversations with the Cardano team on what the collaboration would achieve.
He says that the fork would allow cross-chain payment settlements between Cardano and Litecoin. It would also improve Litecoin’s scalability and introduce support for smart contracts.
The proposed upgrade is called a “velvet fork” because it is neither a hard fork nor soft fork; instead, it is optional, and there is no need for consensus. Miners will be able to continue serving the Litecoin network, whether they install the upgrade or not.
The fork uses a system called “Non-Interactive Proofs of Work” (NiPoPoWs) that, among other things, allows blocks to be verified across different blockchain networks.
Will Litecoin Add The Feature?
It isn’t certain that the upgrade will be implemented. Some risks come with adding the feature, and Schwartz notes that “earnest and open discussion on all aspects of such a move for Litecoin is needed.”
He says that the question is not just for developers and miners but also the entire Litecoin community.
Though the proposal has some support, a few have opposed it. One commenter suggests that, because it is a proposal by Cardano, the Cardano team should work on implementing cross-chain swaps on its own.
Another commenter argues that “Litecoin needs to stand on its own and not piggyback with Cardano.”
However, there is precedent for a partnership between blockchain projects. Litecoin is currently collaborating with Grin’s David Burkett on private transactions. Though the “velvet fork” appears to be a bigger task, a similar partnership with Cardano seems quite plausible.
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