Definition

Cardano operates as a public blockchain that secures its ledger through the Ouroboros proof-of-stake protocol. The network offers a permissionless environment in which any participant deploys smart contracts, issues tokens, or constructs decentralized applications without a central coordinator.

Cardano rewards token holders who lock ADA for block production. Each epoch lasts five days. During that period, stake pools validate transaction batches, append blocks along with receive ADA that the protocol mints as monetary expansion. The reward splits between the pool operator and the delegators in proportion to the stake each contributed.

The blockchain entered the Voltaire governance phase in January 2025. On-chain voting now controls parameter updates, treasury withdrawals in addition to protocol amendments. ADA trades under the ticker symbol ADA on more than fifty centralized exchanges and on every major non custodial wallet that supports native Cardano assets.

Origins and Architecture

Charles Hoskinson but also Jeremy Wood founded Input Output Hong Kong in 2015 to design a new blockchain from peer reviewed research. The first source code appeared in 2017 under the Byron bootstrap phase. The ledger uses the extended unspent-transaction-output model, which records value at addresses instead of accounts. The settlement layer remains separate from the computation layer that hosts Plutus smart contract scripts. Native tokens live directly inside the ledger state – transfers avoid the gas fees that smart contract tokens on Ethereum require.

The Cardano Foundation, a non profit registered in Switzerland, promotes education, adoption next to policy dialogue. IOG continues as the lead research and engineering contractor. EMURGO, a Japanese venture studio, funds commercial projects that build on the network.

Hard Forks

Cardano labels each major upgrade as a hard fork that introduces new ledger rules. Ten such events have activated since 2017:

• Byron – genesis block, federated nodes
• Shelley – Ouroboros PoS, stake pools, delegation certificates
• Allegra – token locking for governance
• Mary – native multi asset support
• Alonzo – Plutus smart contract platform
• Babbage (Vasil): reference scripts, collateral output, diffusion pipelining
• Valentine – SECP-256k1 curve for cross chain bridges
• Chang – CIP-1694 on chain governance
• Plomin – full constitution ratification

Shelley removed the seven federated block producers that Hoskinson controlled during Byron. Stake-pool operators now produce every block. Alonzo introduced the Plutus Core virtual machine and the eUTxO smart contract model. Vasil raised the block size to 72 KB and cut script memory limits, which lowered transaction fees for decentralized exchanges. Chang activated the constitutional committee, delegate representatives, and a treasury withdrawal mechanism. Plomin completed the transition to community rule.

Smart Contracts

Alonzo launched on testnet in August 2021 and reached mainnet in September 2021. Plutus scripts run deterministically inside the eUTxO ledger. Each script attaches to a specific output and executes only when a transaction consumes that output. The model prevents re entrancy attacks and yields predictable fees before submission. Developers write contracts in Haskell, compile them to Plutus Core, and deploy them as on chain hashes. Popular applications include the Minswap automated market maker, the Indigo synthetic asset protocol, and the Djed over collateralized stablecoin.

Cryptocurrency Staking

ADA holders delegate coins to a stake pool through a certificate transaction. The protocol freezes the coins in place but never transfers custody. The pool operator must hold at least one pledged ADA. The pledge amount, declared in the pool registration certificate, influences the probability that the pool receives block production rights. Each epoch, the protocol distributes approximately 0.3 % of the total ADA supply as rewards. A pool that produces every assigned block receives the maximum reward. Missed blocks reduce the payout. Delegators receive rewards minus the operator margin, which typically ranges from one to four percent.

A stake pool runs on at least one block producing node and two relay nodes. The operator maintains the topology file, rotates KES keys every ninety days, and monitors for slot battles and height battles. Hardware requirements include eight CPU cores, sixteen GB RAM, a one Gbps symmetric link. Cloud instances on AWS, Google Cloud, or bare metal servers in tier three data centers satisfy the specification.

Comparison With Bitcoin

Bitcoin serves as peer-to-peer electronic cash. Cardano serves as a programmable settlement layer for decentralized applications. Bitcoin secures the ledger through proof-of-work, which consumes roughly 150 TWh per year. Cardano secures the ledger through proof-of-stake, which consumes less than 6 GWh per year. Bitcoin miners race to find a nonce that produces a hash below the target. Cardano validators are selected to produce blocks in proportion to their stake. Bitcoin mining demands application specific integrated circuits and industrial electricity contracts. Cardano staking runs on a laptop or a Raspberry Pi.

Bitcoin transaction throughput averages seven transactions per second. Cardano processes roughly 250 simple transfers per second on layer one. Bitcoin transaction finality requires six confirmations, or sixty minutes at ten minute block intervals. Cardano transaction finality arrives after one confirmation, or twenty seconds at twenty second slot intervals. Bitcoin script is intentionally limited to preserve security. Cardano script is Turing-complete and supports arbitrary computation.

Development Phases

The roadmap divides into five sequential phases:

• Byron – foundation, federated consensus, Daedalus wallet
• Shelley – decentralization, stake pools, delegation
• Goguen – smart contract platform, native assets, Plutus
• Basho – scalability, sidechains, Hydra heads
• Voltaire – governance, treasury, constitution

Voltaire concluded in January 2025 with the ratification of the Cardano Constitution. The document defines the delegate representative process, the constitutional committee, and the treasury withdrawal policy. The protocol now funds itself through a 0.3 % monetary expansion and a 0.2 % transaction fee burn. Every ADA holder votes on parameter changes, hard fork proposals along with treasury grants through the CIP-1694 governance action framework.

Future Outlook

IOG engineers continue research on Leios pipelining, Ouroboros Peras fast finality, and ZK-rollups on the Mithril certificate chain. The Hydra head protocol offers state channels that process thousands of transactions per second off-chain and settle on chain in a single transaction. Community proposals under review include stable fees in fiat terms, privacy sidechains in addition to a decentralized identity registry.

As of June 2025, the treasury holds 1.2 billion ADA. Each quarter, delegate representatives vote on budget allocations for tooling, education next to ecosystem grants. The protocol no longer depends on IOG for code delivery. The network now upgrades through open source contributions and on-chain governance alone.