Cardano Token ADA

What You Need to Know About Cardano - Explained Simply

Cardano is an alternative L1 (Layer 1) blockchain and smart contract platform designed for various use cases including financial solutions, data services, entertainment, and so on. Cardano has a team of capable members and long history behind it with Charles Hoskinson as a founder. In this article, we will have a closer look at what Cardano is, how it works, as well as a bit of history.

What is Cardano?

Cardano is an advanced blockchain platform, built to support decentralized applications (dApps) via smart contracts. Developed by Ethereum co-founder Charles Hoskinson, Cardano distinguishes itself with a strong emphasis on a research-led approach and scientific philosophy. It operates its own native cryptocurrency, ADA, which fuels the network's operations.

As a third-generation blockchain (Bitcoin first, Ethereum second), Cardano is designed to address the challenges of earlier blockchain platforms, aiming for scalability, sustainability, and balance between user needs and regulatory standards.

The Story of Cardano

Cardano was created in 2015 by Ethereum co-founder Charles Hoskinson, who sought to create a blockchain that addressed the limitations of earlier generations. Hoskinson's vision was to build a secure, scalable platform that balanced the needs of users with those of regulatory bodies.

Hoskinson established IOHK (Input Output Hong Kong) to develop Cardano, emphasizing a research-led approach. This methodology stood out in the fast-paced world of technology, as each feature was meticulously scrutinized by a team of experts before implementation.

The mainnet launched in 2017, solidifying Cardano's place in the blockchain landscape. Today, Cardano continues to evolve, marked by its commitment to ongoing research, development, and a balanced, sustainable ecosystem.

Technology and Unique Features

What truly distinguishes Cardano from its competitors is its dedication to scientific philosophy and a research-driven approach. The platform’s development process is led by a team of expert engineers and academics in blockchain technology, ensuring that every feature and update is rigorously scrutinized and tested before being implemented.

ADA: The Native Currency

The native cryptocurrency used on the Cardano blockchain is known as ADA. This digital currency serves multiple purposes within the Cardano ecosystem - it's employed in the network's proof-of-stake consensus mechanism, used to cover transaction fees, and can also act as a medium for value exchange.

Tokenomics

• Total Supply: 45 billion ADA tokens
• Distribution: 25.9 billion distributed through public sales, 5.2 billion left for governing entities like Cardano Foundation, IOHK, and so on
• Emission: new tokens enter circulation as a reward for stakers. Emission slows gradually until it reaches maximum supply.

Consensus Mechanism: Ouroboros

Cardano uses a unique proof-of-stake consensus mechanism known as Ouroboros. It's designed to be energy-efficient and secure. Ouroboros enables scalability and sustainability, key tenets of Cardano's philosophy, by allowing more transactions to be processed with less energy compared to proof-of-work systems.

In the Ouroboros system, the task of validating transactions and creating new blocks is held by nodes referred to as slot leaders. Slot leaders are chosen from a pool of ADA holders who have staked their coins.

Smart Contracts on Cardano

Cardano has worked for a long time without smart contracts and they were a highly anticipated addition to the network. The update that made smart contracts possible was implemented in 2021 - allowing the deployment of new contracts and the creation of dApps.

Unlike Ethereum and EVM chains, Cardano uses purpose-built programming languages for building smart contracts. Examples include Plutus and Marlowe.

Native Tokens

Another distinguishing feature is that Cardano supports the creation of native custom assets (tokens) without creating new smart contracts. On Ethereum, every particular token (apart from ETH) is represented as a unique smart contract, which adds a level of complexity to the process. Cardano is able to create assets in a much more convenient way.

Application Ecosystem

DeFi (Decentralized Finance)

Cardano has a growing number of DeFi applications. These platforms aim to recreate traditional financial systems, such as lending and borrowing, insurance, and asset trading, in a decentralized manner, removing the need for intermediaries.

• DEXs/Swaps: Minswap, WingRiders
• Lending Platforms: Liqwid
• Stablecoins: Djed Stablecoin

NFTs (Non-Fungible Tokens)

Cardano also supports the creation and exchange of NFTs, unique digital assets that represent ownership of a specific item or piece of content. NFTs on Cardano benefit from the platform's scalability and lower transaction fees.

NFT Marketplaces: jpg.store, Flipr, Explosif

Blockchain Gaming

The blockchain gaming boom surely didn't avoid Cardano. We are seeing a tremendous number of games and dApps with gaming elements on the Cardano blockchain. These games benefit from NFT integration, native asset creation as well as high speed and scalability.

Examples of popular games: Cornucopias, CryptoMage, HashGuardians

Wallet Apps

Cardano offers several wallet applications that allow users to securely store, send, and receive its native ADA tokens. These wallet apps provide user-friendly interfaces and robust security measures to ensure the safe and convenient management of digital assets. They also enable users to participate in staking, allowing them to earn rewards by contributing to the network's security and operation.

• Daedalus Wallet: A secure, multi-platform, HD (hierarchical deterministic) wallet for the Ada cryptocurrency. It's a full-node wallet, meaning it downloads the entire Cardano blockchain.
• Yoroi Wallet: A light wallet for Cardano. Yoroi is simple, fast, and secure, and it operates as a browser extension, allowing for quick and easy access to your Ada holdings.