Cardano: sustainable blockchain – The Cryptonomist
Founded in 2015 by Charles Hoskinson, former co-founder of Ethereum, Cardano is an L1 Proof-of-Stake blockchain designed to be environmentally sustainable and scalable.
The network’s native coin, $ADA, is used to pay transactions and secure the network, and therefore plays a key role in the network’s consensus mechanism called Ouroboros.
Now let’s delve into what are the features of one of the most capitalized crypto projects on the market.
Cardano: features and operation
The original idea behind the development of Cardano was to go and develop a so-called “third generation” blockchain, which could go and give developers a highly scalable and energy efficient open source smart contract platform.
One of the features that sets Cardano apart from other PoS blockchains is the design of its original consensus mechanism, Ouroboros, which focuses on maximize randomness of the choice of block leader, i.e. the validator nodes responsible for proposing new blocks on the blockchain.
Increasing the randomness in block leader selection allows the blockchain to avoid creating patterns that would render the security of the network flawed and increase the possibility of exploits and DDoS attacks.
The current version of Ouroboros, called Ouroboros Praosis currently the third version of the network consensus mechanism, and brings security and scalability improvements to the network.
Future notable updates include Ouroboros Crypsinouswhich will adopt zero-knowledge technology to further improve network privacy.
The Cardano blockchain is divided into two layers: Cardano settlement layer (CSL) and Cardano data layer (CCL).
The first layer is where transactions are validated by the network’s consensus mechanism, while the second is responsible for performing the functions of apps using the network, through the use of smart contracts.
Another plus point of Cardano is excellent waiting timewhich allows the blockchain to quickly spread data regarding block validation across the entire network, reaching 95% of participants in about 5 seconds.
Cardano’s development roadmap is divided into “eras”, named after characters related to the literary and scientific world.
The current era, called Basho, focuses on the scalability of the network, with the aim of preparing Voltaire, which will be the last phase of the network, which will be equipped with management system and financial management mechanisms.
The Cardano ecosystem: dApps and DeFi
The Alonzo hard fork on September 12, 2021 enabled the network to support smart contracts, paving the way for the development of dApps on the blockchain.
Currently, TVL (Total Value Locked) is locked on the chain at $155 million.
The two most capitalized dApps are Minswap, the leading DEX, and Indigo, a stable coin issuance protocol.
Compared to the capitalization of $ADA token, which stands at $14B, we can see that DeFi’s development on the blockchain is still quite immature.
Among the most liquid pools linked to Cardano we can find the ADA/WBNB pair on PancakeSwap V2 , with liquidity of around $4M.
Conclusions
Although it turns out to be one of the most market capitalized crypto projects, we got to see how the development of the network is still far from finished, and how the dApps available on the blockchain are still underutilized and in the embryonic stage.
Future technical updates to the network, among them the introduction of zero-knowledge technology, still give the protocol room for development and adoption.
Will Cardano be able to grow its base of dApps and users and remain in the top 10 (it is currently 7th) of the most capitalized crypto projects, or will it be overtaken by next generation blockchains?
