Cardano, named after Italian Renaissance mathematician Gerolamo Cardano, is a third-generation blockchain designed to have smart contract functionality with an emphasis on scalability, sustainability, and decentralization.
Cardano is well-known for the team’s systematic peer-review approach to blockchain development, which has arguably led to a blockchain that can execute relatively faster and cheaper transactions.
Also, Cardano claims that users can worry less about security and architecture accuracy than if they had used other “Ethereum killer” competitors.
How does it work?
All transactions are processed in two separate blockchain layers. The Cardano Settlement Layer (CSL) keeps token balances and validates transactions using Cardano’s consensus mechanism.
Meanwhile, the Cardano Computing Layer (CCL) is in charge of executing CSL transactions according to the rules set by the tokens’ DAOs.
Cardano’s own proof-of-stake (PoS) consensus algorithm Ouroboros selects block creators in a faster, more secure way than other PoS mechanisms.
Its latest iteration, Ouroboros Hydra, can theoretically process 1 million transactions per second.
Some projects also prefer the Cardano blockchain because it’s written in Haskell, a programming language that can test project components in isolation and decrease the chances of security and architecture errors.
The speed and security offered by Ouroboros and Haskell make Cardano a good option for DeFi and NFT projects.
Team background
The Cardano project began in 2015 when Ethereum co-founder Charles Hoskinson left the Ethereum Foundation with colleague Jeremy Wood to establish Input Output Global (IOG or IOHK).
Cardano is currently being developed by three entities: IOHK develops and engineers the Cardano blockchain; Swiss-based non-profit Cardano Foundation hires IOHK and supervises the development of the project, while Emurgo seeks commercial opportunities and helps integrate businesses into the Cardano ecosystem.
If the organizations stick to Cardano’s roadmap, the development and governance of the Cardano ecosystem will eventually be in the hands of the community and will make Cardano a fully decentralized project.
What is the ADA token?
Cardano’s native token ADA (₳) is named after Ada Lovelace, a 19th-century mathematician who is often regarded as the world’s “first computer programmer.”
Like ETH, ADA is used to pay transaction fees and is staked by validators and delegators to participate in securing the network.
ADA will also be used as a governance token that will allow holders to vote on changes and upgrades to the Cardano platform.
As one of the most popular cryptocurrencies, users can buy and trade ADA on any major crypto exchange and use their tokens for staking and lending activities.
Token Metrics:
- 3.4M unique addresses
- Market cap: $38.92B
- Fully diluted market cap: $52.14B
- Circulating supply: 33.5B ₳
- Max supply: 45B ₳. Similar to Bitcoin, the rate at which new ADA is minted decreases over time such that the circulating supply asymptotically approaches the maximum supply
Notable Projects:
- Minswap: Automated Market Maker DEX
- WingRiders: Automated Market Maker DEX
- SundaeSwap: Automated Market Maker
- Aada: Borrow & Lending protocol
- VyFinance: Various DeFi services including swapping, staking, farming, and NFTs