Cardano Advances Blockchain Innovation with CIP25 Metadata Validation, Boosting NFTs and AMMs

• L2 framework developer Paima Studios has announced a new way to access transaction metadata directly from Cardano’s Plutus smart contract language.
• Aiken’s new smart contract accesses the transaction hash, which contains the metadata, opening up new opportunities in NFT AMMs, on-chain gaming, interoperability, and more.

As Cardano grows to embody a thriving decentralized ecosystem, one challenge that has plagued the network is the inability of the native smart contract language, Plutoto access transaction metadata, hold NFTs, on-chain gaming, and more. Paima Studios, a Web3 application engine company, has now solved this challenge.

Paima co-founder Sebastien Guillemot announced the new update over the weekend.

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Cardano NFTs — which have become increasingly popular—are issued under the CIP25 token standard. This standard, similar to Ethereum’s ERC-721, defines how NFT issuers define an NFT’s attributes, such as its image, name, URL, and more in its transaction metadata.

Until now, the challenge for Cardano developers has been that the network’s Plutus smart contract language cannot access this metadata. This has prevented dApps built on Cardano from accessing this data and limited the extent to which NFTs on the network can be utilized.

First, it’s worth noting that this isn’t just a Cardano issue. Ethereum, despite being much more advanced, also suffers from similar flaws. Ethereum developers overcome this challenge by using oracles that bind to off-chain data or by adding some other complex mechanism.

Cardano developers have also tried to solve this challenge. The most common solution is a new improvement proposal — CIP68. This standard completely abandons transaction metadata, turning to a new on-chain data system known as datums.

CIP68 solved the problem, but it created new challenges. For example, many tools built on Cardano still support the previous standard — CIP25. It is also more expensive because it relies on datums, which require twice as many UTXOs, making it twice as expensive as the previous standard.

Solving Cardano’s NFT Transaction Metadata Challenge

Guillemot and his team at Paima propose a new approach that seeks to access metadata directly through Plutus, regardless of the token standard. To do this, the team uses Plutus to access the transaction hash, which contains the metadata.

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Under this proposal, a Plutus smart contract is armed with the final transaction hash and proceeds to provide all other fields and verifications that the hash matches.

Guillemot explained the mechanics, stating:

We built an Aiken smart contract that does exactly that: it reconstructs the binary transaction data in Aiken and checks if it matches the hash! This answers one of two questions: Is it feasible? Is it efficient/cheap enough?

Guillemot’s team found that this new approach costs half as much as the current CIP68 standard, as it reduces the number of UTXOs.

Meanwhile, ADA is trading at $0.3744, gaining 2.36% over the past day, where it fell to a 24-hour low of $0.3335 before staging a recovery.

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