Cardano (ADA): What is the core and novelty?

Cardano is a blockchain platform that utilizes the Proof-Of-Stake algorithm to build decentralized applications powered by smart contracts. ADA, the native cryptocurrency of Cardano, is a prime illustration of a digital asset produced on the Cardano blockchain. The pioneering architectural advancements within Cardano can be accredited to the extensive research collective. This group of researchers regularly releases a significant volume of peer-reviewed academic papers focused on advancing the blockchain initiative.

When and under what circumstances did Cardano come into existence?

Cardano was brought into being through the collaborative efforts of multiple visionaries:

• One of the key figures in the inception of Bitshares and Ethereum was the accomplished mathematician and entrepreneur, Charles Hoskinson. He leads IOHK and holds the prestigious title of the “high priest” in the world of Cardano.
• Jeremy Wood, the Director of Strategic Development, also played a pivotal role. After assuming the role of executive director at the Ethereum Foundation towards the end of 2013, he went on to provide valuable consulting expertise to various cryptocurrency ventures.
• Aggelos Kiayás, who serves as the chief researcher, cryptographer, and professor at the University of Edinburgh, is actively engaged in the project.

The Cardano platform was officially launched on September 29, 2017, followed by the initiation of token trading on October 1, 2017.

The blockchain got its name from Gerolamo Cardano, an extraordinary Italian scholar who excelled in mathematics, physics, astrology, chemistry, philosophy, literature, and gambling during the years 1501 to 1576.

Using scientific approaches and mathematical verifications rooted in game theory and math, Charles Hoskinson created the Cardano project to establish a fresh form of programmable currency that offers adaptability and compatibility.

Who is in charge of the Cardano Development Initiative?

• Cardano Foundation – headquarters in Zug (Switzerland), a non-profit entity established with the aim of “advancing,” standardizing, protecting, and enhancing Cardano technology. The responsibilities involve engaging with financial regulators, governmental bodies, and the general public, in addition to forging strategic alliances with other ventures.
• IOHK (“Input Output Hong Kong”) is a firm established by Wood and Hoskinson that specializes in engineering and technology solutions. Through a pact with the Cardano Foundation, the company has been designated as the principal developer of the platform until at least 2020.
• Emurgo, an investment fund, maintains branches in Singapore, Japan, the United States, India, and Indonesia. Its mission is to substantially contribute to the advancement and backing of commercial ventures, and to streamline their incorporation into the Cardano ecosystem.

A key distinguishing factor compared to its rivals lies in the thriving research community within the realm of Cardano. Many scientific papers authored by researchers propose solutions to the challenges and objectives that the project faces.

The core principles underpinning the architecture of the blockchain

Initially, Cardano embraced the Proof-of-Stake model inspired by Bitcoin, known as “the UTXO”. However, during the Shelley era, they also incorporated an account model reminiscent of Ethereum. These addresses are utilized for receiving rewards, allowing Cardano to leverage the benefits of both models.

Comprehensive data regarding the source and flow of financial resources can be accessed at the entry and exit junctures. The inbound and outbound transactions showcase the specific account initiating the fund transfer, along with the destination address.

To prevent redundancy, every entity within the network maintains records of transactions. Upon the introduction of a new transaction into a block or mempool, it undergoes scrutiny to verify potential alterations to the unspent outputs linked to each address within the network.

Although the UTXO architecture has its limitations when it comes to handling smart contracts, Cardano introduced an innovative solution in the form of Enhanced UTXO (EUTXO) to tackle this issue. This upgraded system allows smart contract execution to be fragmented into various operations, with each transactional output housing specific data relevant to the contract. The integration of EUTXO into the primary Cardano network occurred post the smart contract deployment.

Features of ADA’s functionality

ADA serves as Cardano’s primary native digital currency. It takes its name from Augusta Ada King, also known as Ada Lovelace (1815-1852), the Countess of Lovelace and daughter of the poet George Byron. Notable for her mathematical prowess, Lovelace conceptualized the first computer and wrote the world’s premiere computer program. She stood as a pioneer among programmers in historical annals. Lovelace’s legacy lives on within the ADA cryptocurrency, where even a fraction (0.000001 ADA) reflects her enduring influence.

Its main purpose is to oversee transactions carried out on the Cardano blockchain, which is the platform behind ADA. According to Messari’s findings in September 2022, the typical transaction fee stood at approximately 0.33 ADA, translating to roughly $0.15-$0.17.

Investing in ADA can be a wise choice. Regular coin holders commonly transfer their assets through node staking pool operators involved in the consensus mechanism. Cardano offers two official wallets with a delegation feature: Daedalus by IOHK and Yoroi by Emurgo. At present, the annual returns from delegating ADA range from 3.7% to 4.2%.

Cardano’s staking pools, an integral part of the network’s consensus mechanism, boast around 3,200 members in the Cardano ecosystem as of September 2022. Beyond the sheer size of the staked amount, numerous other variables influence the pool’s profitability. Among these factors:

• One crucial element is the saturation metric, which is determined by the pool’s mass relative to others and the ratio of total pools to the value dictated by the Cardano protocol. As a staking pool becomes more “saturated,” its profits decrease. This metric serves as a safeguard against centralization within the Cardano system, ensuring that dominant pools do not monopolize the network.
• The “desirability” indicator is incorporated into the index. It is computed by taking into account the dimensions of the steak, whether it is prepared or left unattended, the revenue and expenses of the pool, its capacity threshold, along with previous performance. Via this metric, holders of Daedalus and Yoroi wallets can receive ADA coins.