What is Cardano?
Cardano is a blockchain platform launched in 2017. It was founded by Charles Hoskinson, one of Ethereum's co-founders. Three organisations helped build it: Input Output, an engineering company; the Cardano Foundation, a non-profit; and EMURGO, which supports business adoption.
Cardano is known for a research-first approach, where many of its designs are published in academic papers before they are built. Its native coin is ADA, named after the mathematician Ada Lovelace.
How does it work?
Cardano uses a proof of stake system called Ouroboros. ADA holders can delegate their coins to a stake pool, run by an operator, without giving up ownership. Pools are picked to produce blocks in proportion to the stake delegated to them, and rewards are shared with delegators.
Smart contracts were added in 2021, allowing apps to run on the network. Cardano also has on-chain governance, where ADA holders and delegated representatives can vote on changes to the network.
What is it used for?
ADA and the Cardano network are used for:
- Paying transaction fees on Cardano
- Delegating to stake pools to help secure the network and earn rewards
- Voting on proposals through on-chain governance
- Using apps built on Cardano, such as exchanges and lending tools
Staking on Cardano works differently from many other networks. Delegated ADA stays in your own wallet and is not locked, so you can move or spend it at any time. Rewards are paid automatically at regular intervals, called epochs. Rewards are not fixed, and they can change with network conditions and the pool you choose. Choosing a reliable, well-run pool also helps keep the network spread across many operators.
Key facts
- Launched: 2017
- Founder: Charles Hoskinson; built with Input Output, the Cardano Foundation and EMURGO
- Consensus: Ouroboros proof of stake
- Blockchain: its own network, Cardano
- Supply: capped at 45 billion ADA by the protocol
Explainer written by Finvane from official project documentation. It is not investment advice.