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Key points
- Litecoin prepares to work with Cardano on a “velvet fork”.
- This fork will add several features including cross-chain fund settlement, smart contracts, and better scalability.
- It is not yet certain that Litecoin will move forward with these plans.
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Litecoin is preparing to collaborate with Cardano on cross-chain interoperability, according to a blog post by 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 the cross-chain communication between Litecoin and Cardano. We have 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 about what the collaboration would achieve.
He says the fork would allow for cross-chain payment deals 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 rigid fork nor a soft fork; instead, it is optional and consent is not required. Miners will be able to continue serving the Litecoin network, regardless of whether they install the update or not.
The fork uses a system called “Non-Interactive Proofs of Work” (NiPoPoWs) which, among other things, allows you to verify blocks on different blockchain networks.
Will Litecoin add functionality?
It is not certain that the update will be implemented. Some risks come from adding the feature, and Schwartz notes that “serious and open discussion is needed on all aspects of such a move for Litecoin.”
He says the demand isn’t just for developers and miners, but for the entire Litecoin community as well.
While the proposal has some support, some have opposed it. One commentator suggests that, as this is a Cardano proposal, the Cardano team should work to implement cross-chain swaps on their own.
Another commentator argues that “Litecoin must stand alone and not on the shoulders with Cardano”.
However, there is a precedent for a partnership between blockchain projects. Litecoin is currently partnering with Grin’s David Burkett on private transactions. While the “velvet fork” appears to be a bigger task, a similar partnership with Cardano seems plausible enough.
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