The Stellar community is preparing for a major network upgrade to introduce Version 20 of the Stellar network protocol. The upgrade is expected to transform the Stellar blockchain by introducing innovative features to the platform. In the long term, the upgrade could trigger an increase in market interest and consequently boost adoption for the Stellar ecosystem.
The upgrade is especially significant for Stellar’s future as it will trigger a switch from Protocol 19 to Protocol 20. Voting for Protocol 20 is scheduled to begin on February 20th.
Protocol 20 will introduce smart contracts to the Stellar Blockchain network, a move that is promising for both the network and the XLM altcoin. Protocol 20 will come with Soroban, a smart contract platform integrated into the Stellar network. Soroban, a wasm-based smart contract platform, is designed to be built-to-scale, batteries-included, and developer-friendly.
It is worth noting that although Soroban works well with Stellar, it does not require the blockchain to function and can be utilized by other blockchains and permissions ledgers.
On the 20th of February, validators will cast their votes, and once approved, Stellar will make the shift from Protocol 19 to Protocol 20.
Validators will go on to deploy a phased approach to slowly and effectively increase capacity for Soroban transactions. This will allow Soroban to monitor the impact of smart contract functionality on the network.
Here’s what to expect after Protocol 20 goes live
The aftermath of the upgrade is promising for the Stellar ecosystem as adoption of smart contact has continued to increase. According to market data, the smart contracts market size accounted for $187 million in 2022 and is “projected to achieve a market size of USD 1,417 Million by 2032, growing at a CAGR of 22.8% from 2023 to 2032.”
As the adoption of smart contract technology continues to grow, blockchain-running smart contracts could benefit from the technology’s features, such as efficiency, security, and immutability. Adoption for Stellar could also trickle down to the price value of its native token XLM.
Market experts are also convinced that smart contracts will bridge the gap between the Crypto/Blockchain industry and other existing traditional industries.
Key players expect smart contracts to become a standard part of the finance, healthcare, legal, and supply chain management industry. This form of mainstream adoption could favour smart contract blockchains like Stellar by solidifying their position in the real world.