On Tuesday (December 7), Input Output (aka “IOG”, aka “IOHK”), the company responsible for Cardano’s R&D, announced that “the AGIX ERC20 converter testnet is live.” This article explains why this is a very bullish piece of news.
Motivation Behind an ERC20 Converter Tool for Cardano
On May 17, IOG published a blog post that explained why it was planning to build an “ERC converter” tool and what it was hoping it would be used for.
They started by explaining that most of the value locked up in decentralized finance (DeFi) is “in the form of crypto-assets based on the ERC20 token standard“, but “Ethereum’s proof-of-work infrastructure is challenged with ever-rising costs”.
In order to “expand the variety of use cases for application developers and businesses”, Cardano would “support the ERC20 token migration to its platform”. The idea was that following the deployment of the Alonzo hard fork (which would provide support for Plutus smart contracts), “users of supported Ethereum tokens will be able to bring them over from Ethereum’s congested network and take advantage of Cardano’s transaction capacity and lower fees, while enjoying enhanced security, reduced cost, and interoperability”.
It went on to say that an ERC20 converter would “ensure better interoperability in the future as well as lay a solid background for extended business opportunities”.
How Does Cardano’s ERC20 Converter Work?
IOG said that their ERC20 converter would “allow issuing organizations and their users to handle ERC20 token migration to Cardano”. It pointed out that this tool is “designed for token issuers (organizations that wish to enable the migration of their tokens to Cardano), and their users (token holders) to use the tool to move their ERC20 tokens to the Cardano network”.
Here’s how the tool can be used:
“Users can convert their Ethereum tokens in just a few clicks, and when moved across, these tokens will be ‘translated’ into a special native token on Cardano that has the same value and works just like an ERC20. Additionally, if the user wishes to do so at a later stage, they can move their tokens back to the source network by burning them on Cardano. Two-way convertibility is baked in.“
First Use Case for Cardano’s ERC20 Converter
IOG stated that the plan was to “spin up a version of the ERC20 converter tool on a dedicated testnet” and that IOG’s first migration partner is decentralized artificial intelligence (AI) network SingularityNET:
“The ERC20 converter will introduce a new SingularityNET AGIX token, the deployment of which marks the first milestone in the SingularityNET to Cardano migration plan. The initial testnet will allow users to assess the process of migration while working with AGIX tokens both in Cardano and Ethereum Kovan testnets.
“It will be possible to authenticate an account using Metamask (an extension for the Chrome browser) with more options to come later. Users will also need to add their Daedalus testnet address so they can migrate their tokens to Cardano and easily track balances and transactions.
“When users log into their ERC20 converter account, they will see SingularityNET tokens listed and available for migration, and, by clicking on a token ‒ details such as token balance. They will just need to select the token, indicate the amount they would like to convert, and then migrate them by specifying a Cardano address. When tokens migrate to the address, it will be possible to use them for payments and transactions from the Daedalus wallet. All the activities will be visible both within Etherscan and the Cardano Explorer.“
What Is SingularityNET?
SingularityNET, which was founded in 2017 by Dr. Ben Goertzel (CEO and Chief Scientist) and Dr. David Hanson, is building three main pillars:
- “the nonprofit SingularityNET Foundation is building a decentralized Al network on which is working on Al infrastructure-as global participants can create, share, and monetize Al services at scale”;
- “Singularity Studio is working on AI infrastructure-asa-service, to offer scalable and affordable cloud computing”; and
- “Singularity Studio is working on offering end-user applications to enterprise and consumer customers”
The AGIX ERC20 Converter Testnet Goes Live
Yesterday (December 7), IOG published a blog post to announce that “the AGIX ERC20 converter testnet is live and ready for community evaluation”. IOG noted that this tool is “a significant step” in its “journey towards a much deeper collaboration with the SingularityNET community”.
Dr. Ben Goertzel, CEO and Chief Scientist at SingularityNET, had this to say:
“I’m extremely excited by the emergence of the AGIX-ADA/AGIX-ETH converter onto Cardano testnet, and soon after that onto mainnet. Every revolution is carried out one step at a time, and this is the first in a series of steps whose result will be the porting of the full SingularityNET decentralized AI platform onto Cardano.
“The importance of this port for SingularityNET and the whole blockchain and AI ecosystems cannot be overestimated – it will yield not only a far faster and more economical AI network, but also a massively superior foundation for adding advanced new functions to SingularityNET and moving toward realizing our vision of decentralized AGI.“
IOG went on to add that EMURGO is “now running the process to allow for secure and seamless token migration from other blockchains and sidechains to Cardano” and that they would “continue pursuing Cardano’s interoperability mission across a range of permissioned and permissionless, producing a mesh of interconnected sidechains with decentralized applications (DApps) written in Solidity, Glow, and more”, which would “expand the base ecosystem of DApps written in Plutus on Cardano”.
Yesterday, SingularityNET also published a blog post to announce “the launch of the public testnet AGIX ERC20 Converter Bridge”. It said that this testnet would “allow users to explore the cross-chain capabilities using test-tokens from the SingularityNET AGIX Testnet Faucet, without needing real AGIX tokens or needing to pay gas fees”, and would enable them to collect user feedback, which they would then “incorporate before the mainnet release”.
Theyw ent on to say:
“This testnet release — enabled by the Alonzo hard fork event and progress in Cardano’s Plutus — allows SingularityNET to actively move ahead to build out our cross-chain ecosystem. Once live on mainnet, this Converter Bridge will mark a significant milestone in the three-year roadmap of the SingularityNET Phase Two initiative.“
They also pointed out they have released a YouTube video that uses animation to show how the AGIX ERC-20 to ADA Converter works:
SingularityNET also mentioned why they were so excited about the testnet launch of their custom-built converter bridge:
“It can be easy to overlook what an exciting milestone this testnet release is for SingularityNET, as our first step to becoming truly multi-chain. This will also be the first bridge connecting to Cardano ever, and AGIX will be the first token able to cross from an external chain — quite an honor.
“This bridge has been a developmental challenge, as Cardano is still in the process of releasing and finalizing its smart contracts platform. The end results of this collaboration are worth the wait, and worth celebrating.“
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.