Cardano

ADA is the native utility token of the Cardano network. It plays a central role in enabling and securing activity across the platform:

• Transaction Processing: ADA is used to pay fees for transferring assets and executing smart contracts.

• Staking and Delegation: Token holders can delegate their ADA to stake pools or operate one themselves, earning rewards for helping maintain network security via the Ouroboros protocol.

• Governance Participation: ADA holders are able to vote on improvement proposals and funding requests through Cardano’s governance system, which will be fully implemented in the upcoming Voltaire era.

• dApp Access: ADA is also required for interacting with decentralised applications built on Cardano’s computational layer.

Ouroboros is Cardano’s proof-of-stake consensus protocol. It is designed to ensure security, decentralisation, and energy efficiency without the high computational costs of proof-of-work systems.

The protocol divides time into epochs and slots, with randomly selected leaders assigned to produce blocks. Validators are selected in proportion to their delegated stake, and rewards are distributed to both pool operators and their delegators based on performance.

Ouroboros has multiple variants - such as Praos and Genesis - that extend its capabilities in areas like network resilience, secure bootstrapping, and stakeholder privacy. Its modular design supports protocol upgrades without undermining consensus integrity.

Cardano’s smart contract functionality is implemented through two purpose-built frameworks:

• Plutus is a high-assurance smart contract language based on Haskell. It allows developers to write on-chain and off-chain code in a unified environment, supporting rigorous testing and formal verification.

• Marlowe is a domain-specific language designed for creating financial contracts. It enables business users to model and execute agreements through visual tools, with built-in safeguards to reduce error and misbehaviour.

Both are built to integrate seamlessly with the Cardano Computation Layer, supporting application development in sectors like decentralised finance, insurance, and identity.