Should IOHK prioritize Cardano's transaction speed improvements or focus on enhancing its smart contract capabilities?

Introduction

The trade-off between prioritizing Cardano's transaction speed improvements or enhancing its smart contract capabilities is a critical decision for IOHK. This scenario involves balancing the core functionality of a blockchain network with its ability to support advanced decentralized applications. I'll analyze this trade-off by examining the product context, stakeholder impacts, and potential outcomes to provide a strategic recommendation.

Step 1

Clarifying Questions (3 minutes)

• Based on Cardano's current market position, I'm thinking transaction speed might be a pressing issue. Could you share our current TPS (transactions per second) and how it compares to our main competitors?

Why it matters: Helps assess the urgency of speed improvements Expected answer: Cardano's TPS is lower than key competitors Impact on approach: If significantly behind, might prioritize speed improvements

• Considering our revenue model, I assume transaction fees play a crucial role. How much of our revenue is currently derived from transaction fees versus smart contract usage?

Why it matters: Indicates which improvement might have a more immediate financial impact Expected answer: Transaction fees are the primary revenue source Impact on approach: Could justify prioritizing speed improvements for short-term gains

• Looking at our user base, I'm curious about the distribution between individual users and dApp developers. What percentage of our active users are currently developing or using smart contracts on Cardano?

Why it matters: Helps understand the demand for enhanced smart contract capabilities Expected answer: Growing but still minority of users actively using smart contracts Impact on approach: Might suggest a phased approach, starting with speed and then enhancing smart contracts

• Regarding our technical roadmap, are there any upcoming protocol upgrades or hard forks that could significantly impact either transaction speed or smart contract functionality?

Why it matters: Identifies potential synergies or conflicts with planned developments Expected answer: Upcoming Hydra layer 2 solution could impact both areas Impact on approach: Might influence the timing and focus of improvements

• Considering our current team structure, do we have separate teams for core protocol development and smart contract enhancements, or is it the same team handling both?

Why it matters: Affects resource allocation and potential parallel development Expected answer: Overlapping teams with some specialization Impact on approach: Could inform how to structure the improvement efforts