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Cardano Price

About Cardano

Cardano was introduced in 2017 as a third-generation blockchain, following Bitcoin and Ethereum. It positions itself as a more secure, scalable and efficient alternative to Ethereum and other decentralized application platforms.

Decentralized applications, or dapps, operate like smartphone apps but without a central authority. They use smart contracts, automated computer programs, to carry out actions when specific conditions are met. For example, a collateralized borrowing dapp that loans money based on a pre-deposited collateral in a wallet. The smart contract sends the loan and can liquidate the collateral if repayments are missed.

Cardano’s ADA cryptocurrency was released in 2017 after a public sale of 25.9 billion ADA tokens starting in 2015. An additional 5.2 billion tokens were divided among the Cardano protocol’s three development entities: Input Output Global (IOG), Emurgo, and the Cardano Foundation. IOG received 2.46 billion, Emurgo 2.06 billion, and the foundation 648 million tokens.

At launch, ADA was priced at $0.02 but rose to an all-time high of $1.31 in 96 days during the 2017 crypto boom. Like most cryptocurrencies, ADA’s price dropped in 2018, falling back to $0.02 by November. After a 2-year wait, ADA returned above $1.31 in early 2021 during a new bull market, reaching a peak of $2.46 in May. A correction happened in May-July, followed by another surge that saw ADA hit a new high of $3.10 in September 2021.

How Cardano works

Cardano’s blockchain is divided into two layers for distinct functions and better efficiency:

  • Cardano Settlement Layer (CSL) for facilitating peer-to-peer transactions of ADA tokens.
  • Cardano Computational Layer (CCL) for executing smart contracts.

The Cardano blockchain uses the “Ouroboros” proof-of-stake (PoS) consensus mechanism for discovering new blocks and adding transaction data. This PoS system involves ADA holders either locking up their coins in pools run by other participants or operating stake pools themselves. To create new blocks, Ouroboros operates in five-day “epochs” with 21,600 smaller units of time called “slots,” with a new slot every 20 seconds. Stake pools are randomly selected as “slot leaders” to add the next block. Running a staking pool requires technical expertise, and rewards for block creation are distributed among the pool operator and stakers in proportion to their staked coins. The more coins held in a stake pool, the higher the chance of being selected as a slot leader, but there is no guarantee.

To prevent large pools from dominating, each pool is governed by a “saturation parameter” that reduces rewards once it reaches a certain capacity, incentivizing ADA holders to move their coins to smaller pools. This Ouroboros system differs from Bitcoin’s proof-of-work (PoW) which requires users to compete for block discovery using specialized computer equipment, with no built-in feature to discourage monopolistic mining.

Cardano Development

Cardano is a blockchain platform that is being developed in five stages:

  1. Byron: Launched the ADA cryptocurrency and its native wallets Yoroi and Daedalus.
  2. Shelley: Emphasized decentralization through delegated staking and growth of stake pools.
  3. Goguen: Introduces smart contracts and custom tokens.
  4. Basho: Adds scalability through sidechains to reduce main chain workload and speed up transactions.
  5. Voltaire: Governance phase introducing a voting and treasury system for community-driven development.

Once live, Cardano will allow developers to create their own custom tokens and smart contracts using the Plutus programming language or Marlowe, a language created for non-programmers to build smart contracts. Sidechains will also be added for scalability, reducing congestion and allowing for faster transactions. Governance will eventually be decentralized, allowing ADA holders to vote on proposals through a weighted staking system.