Stellar Network Upgrade Targets Smart Contract Scalability—XLM Poised for Rally

• Stellar Validators propose a new upgrade to significantly increase its ledger read or write limit while improving the event size limit. 
• A successful implementation is expected to improve longer swap routes and the exchange rate of tokens in Soroswap. 

In our last update, we discussed the groundbreaking launch of the Soroban Smart Contract capability on the Stellar mainnet. Fascinatingly, the Stellar Validators have indicated their plans to enhance its functions through a proposal called SLP-0001.

Analyzing the release, CNF discovered that the complete upgrade would enable more advanced Decentralized Applications (DApps) on the Stellar network. In doing so, the performance of the network would be significantly enhanced. Meanwhile, the proposal makes two crucial adjustments – Increase the higher ledger read or write limits and increase the event size limit.

Currently, each transaction is reported to have the capacity to read 40 ledger entries and write 25. Fascinatingly, the upgrade would ensure that the read limit is increased to 100 while the write limit is adjusted to 50.

Looking at the impact, it is reported that the change would enable the accommodation of more complex operations which include “multi-step financial calculations or interactions between different smart contracts.”

Analyzing the current event size limit, we observed that the current operation carries up to 8KB. After the upgrade, this limit would increase to up to 16KB. According to the report, cross-chain applications like Squid Router would greatly benefit from this exercise.

Importance of the SLP-0001 Upgrade

Explaining the potential impact of the much-anticipated upgrade, the Stellar Validators highlighted that the current innovative features, which have been greatly affected by the existing limitations, could witness jaw-dropping changes. One of them is Hoops Finance. According to the report, it would be able to manage liquidity across multiple pools effectively. Interestingly, this would be done without relying on inefficient workarounds.

Additionally, the Soroswap would witness longer swap routes to improve the exchange rate of tokens. Meanwhile, the Yieldblox and Blend Protocol would have their collateral options for lending platforms expanded while the Cross-Chain Projects emit larger data payloads without affecting user experience.

Subjecting the current performance to tests, the developers observed that there had been a slight increase in transaction processing time from 187ms to 205ms. Fascinatingly, this appears within the acceptable range of 250ms as the team assures that the expected change would maintain long-term sustainability.

Apart from these technical impacts, users and developers are also reported to stand a chance of building more complex applications. According to them, this may include advanced lending platforms, cross-chain integrations, etc. On the other hand, users would have a better chance of “enjoying” a faster and more effective financial tool that could handle different purposes, as highlighted in the announcement.

Stellar has, over the years, deployed multiple transformational features, including new security mechanisms. As detailed in our previous news piece, the network collaborated with Blockaid to integrate an advanced Onchain Detection and Response (ODR) technology to enhance the general performance of the network.

Prior to that, Stellar had partnered with Hypernative to improve its network security and protect its ecosystem against threat actors, as indicated in our earlier discussion. Amidst the backdrop of this, XLM has declined by 0.8% in the last 24 hours to trade at $0.43. However, analysts believe that the asset could soon react to the recent development and embark on a rally.