Concurrency may or may not improve a system’s performance, throughput, or responsiveness. The amount of concurrency limits the maximum number of simultaneous operations that can be performed. To obtain actual performance improvements in a UTXO-based blockchain, processors or other actors should be able to perform multiple actions simultaneously. The higher the level of concurrency, the higher the maximum possible parallelism. Such an approach then translates to performance improvements and throughput. It also provides significant advantages over account-based systems (like Ethereum).

Understanding concurrency

To learn more about scalability, you can read <a href="https://plutus.readthedocs.io/en/latest/plutus/howtos/writing-a-scalable-app.html" rel="noopener noreferrer" target="_blank">how to design a scalable Plutus application </a>and find out how to organize DApps on Cardano using <a href="https://plutus.readthedocs.io/en/latest/plutus/explanations/order-book-pattern.html" rel="noopener noreferrer" target="_blank">order book patterns </a>. Developers have also presented <a href="https://medium.com/meld-labs/concurrent-deterministic-batching-on-the-utxo-ledger-99040f809706" rel="noopener noreferrer" target="_blank">concurrent and deterministic approaches to the eUTXO smart contract architecture </a>that might be regarded as a generalization of the parallel state machine steps introduced in the <a href="https://iohk.io/en/research/library/papers/hydrafast-isomorphic-state-channels/" rel="noopener noreferrer" target="_blank">Hydra paper </a>to realize multi-step state machines. A number of other <a href="https://twitter.com/ErgoDex/status/1434241104015151105?s=20" rel="noopener noreferrer" target="_blank">developers </a>and community members have also published papers, <a href="https://youtube.com/watch?v=TxnvYsBnLjQ" rel="noopener noreferrer" target="_blank">videos </a>, <a href="https://sundaeswap-finance.medium.com/concurrency-state-cardano-c160f8c07575" rel="noopener noreferrer" target="_blank">articles </a>, and useful <a href="https://twitter.com/CardanoMaladex/status/1434960813006200835" rel="noopener noreferrer" target="_blank">threads </a>on Twitter outlining their approaches.

Cardano is a UTXO-based blockchain, which utilizes a different programming paradigm for decentralized applications (DApps) from other account-based blockchains like Ethereum. The specific flavor Cardano uses is the <a dir="ltr" href="https://iohk.io/en/blog/posts/2021/03/11/cardanos-extended-utxo-accounting-model/" rel="noopener">Extended Unspent Transaction Output (eUTXO) model </a>introduced by the Alonzo upgrade. eUTXO offers greater security allowing for smart contract execution cost predictability (without unpleasant surprises) and, as a result, offers a different approach to parallelization.

DApps built on Cardano are not limited to one transaction per block.the block budget allows the execution of hundreds of simple transactions and several complex scripts. However, the eUTXO model allows spending a transaction output only once. Given that users can face contention issues trying to access the same UTXO, it is important to use many different UTXOs. Sets of UTXOs can be used to implement design patterns that include semaphores. a smart contract can handle a number of different UTXOs that make up its current state and off-chain metadata that allows interpreting those UTXOs.

Cardano’s approach to DApp deployment is different and thus it requires a learning curve and a different approach. This is like working with different programming languages: there is one goal – to deploy a solution, but so many programming languages to use for this purpose.

Deploying DApps on UTXO ledgers  is different

Maximizing concurrency is a skill that needs to be learned: developers need to write code in a way that severely restricts the opportunities for contention (e.g., by avoiding shared states and accidental dependencies). The system must then translate this concurrency into parallelism. A number of developers have already identified ways to approach this, while others are still developing solutions. Simply transplanting lessons learned on one blockchain will not work; while the learning curve is a little steeper, the results make this worthwhile.

eUTXO inherits the per-branches design of the UTXO (Bitcoin) model, where one branch is by definition a sequence of transactions that requires a sequence of validations. To split the logic across different branches and enforce more parallelism, it is essential to build DApps and other solutions using multiple UTXOs . This provides benefits in terms of scaling, just like developing Bitcoin services prerequisites splitting one wallet into sub wallets.

By increasing parallelism, we can ultimately improve the throughput of the system while keeping the performance of individual operations the same, but this sort of scalability will always be limited by the degree of contention.Concurrency is essential to allow multiple actors to progress on a certain task without interfering with each other. Parallelism allows such progress at the same time without any interference. Contention occurs when those multiple actors interfere with each other while working either concurrently or in parallel.

Blockchains achieve immutability and transparency of transaction processing differently. Criteria:<ul><li>Throughput – the number of operations a system can perform within a certain time period. This relates, for example, to the number of transactions or smart contracts processed in one second.</li><li>Performance – how fast the system works. Performance measures the time of transaction or smart contract execution.</li><li>Scalability – the ability of the system to perform multiple operations without overloading the network or influencing performance properties.</li></ul>

Doing things in parallel

The Alonzo hard fork event will introduce the core building blocks of Plutus 1.0. This is the beginning of ecosystem growth. Although it is still early, the Alonzo testnet allows our developers to assess system properties and build scalable DApps in advance – preparing for their mainnet launch. Later this month, the <a href="https://summit.cardano.org/" rel="noopener noreferrer" target="_blank">Cardano summit </a>(25-26 September) will showcase many projects, plus provide important updates on the smart contracts roadmap and the ongoing evolution of the technology stack. Developer events, hackathons and the results of Project Catalyst will continue to bring new tools.

Moving forward

Either way, it is important to understand that to deploy a scalable DApp on Cardano, a developer can’t just use an adapted Ethereum contract. Cardano is based on the UTXO model; it is not account-based. And this means that a single on-chain state will not meet the concurrency property on Cardano. Instead, DApps should split up their on-chain state across many UTXOs. This will increase the concurrency in their application, thereby allowing higher throughput.A developer looking to deploy on the Cardano mainnet would need to improve the scalability of the architecture accordingly.

Cardano’s eUTXO model provides a secure and versatile environment to process multiple operations without system failures