What is Cardano ?
Cardano is a groundbreaking proof-of-stake blockchain network, being developed into a decentralized application (DApp) development platform with a multi-asset ledger and verifiable smart contracts. Built with the rigor of high-assurance formal development methods, Cardano aims to achieve the scalability, interoperability, and sustainability needed for real-world applications. Cardano is designed to be the platform of choice for the large-scale, mission-critical DApps that will underpin the economy of the future.
Based on peer-reviewed academic research, Cardano has an ethos of openness and transparency. All of the research and technical specifications that underpin Cardano are publicly published, and all Cardano development activity is made available to the public. Cardano is designed by a global team of experts who are leaders in disciplines ranging from distributed systems to programming languages and game theory and is jointly developed by IOHK and partners. IOHK develops the technology, the Cardano Foundation is responsible for supervising development and promoting Cardano, while Emurgo drives commercial adoption. While we are building Cardano, we are merely custodians. When the network is fully decentralized it will belong to the community, and it will be the community who decide its future through advanced governance features.
What is Ada?
Ada Is The Native Token Of Cardano
It is named after Ada Lovelace: a 19th-century mathematician who is recognized as the first computer programmer, and is the daughter of the poet Lord Byron.
What Can I Do With Ada ?
Ada is a digital currency. Any user, located anywhere in the world, can use ada as a secure exchange of value – without requiring a third party to mediate the exchange. Every transaction is permanently, securely, and transparently recorded on the Cardano blockchain.
Every ada holder also holds a stake in the Cardano network. Ada stored in a wallet can be delegated to a stake pool to earn rewards – to participate in the successful running of the network – or pledged to a stake pool to increase the pool’s likelihood of receiving rewards. In time, ada will also be usable for a variety of applications and services on the Cardano platform.
How Do I Buy/Sell Ada?
You can buy or sell ada for fiat or other cryptocurrencies using cryptocurrency exchanges. Visit coinmarketcap to see the list of exchanges that support ada.
As an ada holder, it is important to keep your funds secure, and that means you need to keep your private keys private. It is highly recommended to avoid keeping your cryptocurrency in an exchange longer than necessary, and instead to use a cryptocurrency wallet. We recommend either a full-node wallet like daedalus, or the browser-based Yoroi.
How Do I Store My Ada And Keep It Safe ?
A cryptocurrency wallet is a software program designed to store your public and private keys, send and receive digital currencies, monitor your balance, and interact with supported blockchains. Ada can be stored using a daedalus or Yoroi wallet – the primary wallets of the Cardano ecosystem, developed, respectively, by IOHK and EMURGO – or other third-party wallets.
In addition to the variation of wallets available, there are also two types of wallets: a hot wallet and a cold wallet.
A hot wallet is connected to the internet and can be accessed at any time with the requisite keys. Examples of hot wallets include mobile and software wallets, and funds stored on exchanges.
A cold wallet is an offline wallet. It is not connected to the internet and is used for securing storing funds that do not have to be frequently accessed. Examples include hardware wallets – which is a secure hardware device that stores the wallet’s private keys – and paper wallets. Cardano is supported by both Trezor and Ledger hardware wallets.
What is a stake ?
Ada held on the Cardano network represents a stake in the network, with the size of the stake proportional to the amount of ada held. The ability to delegate or pledge a stake is fundamental to how Cardano works.
There are two ways an ada holder can earn rewards: by delegating their stake to a stake pool run by someone else, or running their own stake pool. The amount of stake delegated to a given stake pool is the primary way the Ouroboros protocol chooses who should add the next block to the blockchain, and receive a monetary reward for doing so.
The more stake is delegated to a stake pool (up to a certain point), the more likely it is to make the next block – and the rewards are shared between everyone who delegated their stake to that stake pool.
What is a stake delegation ?
Delegation is the process by which ada holders delegate the stake associated with their ada to a stake pool. It allows ada holders that do not have the skills or desire to run a node to participate in the network and be rewarded in proportion to the amount of stake delegated.
What is a stake pool ?
Stake pools are run by stake pool operators. These are network participants with the skills to reliably ensure consistent uptime of a node, which is essential in ensuring the success of the Ouroboros protocol and the Cardano network as a whole.
The protocol uses a probabilistic mechanism to select a leader for each slot, who will be expected to create the next block in the chain. The chance of a stake pool node being selected as slot leader increases proportionately to the amount of stake delegated to that node. Each time a stake pool node is selected as a slot leader and successfully creates a block, it receives a reward, which is shared with the pool proportionate to the amount each member has delegated. Stake pool operators can deduct their running costs from the awarded ada, as well as specify a profit margin for providing the service.
Will The Ada Rewards I Earn Be Addes To My Delegated Stake ?
Yes. Rewards earned accrue with your original stake. When rewards are received, the balance of your reward account increases – and, consequently, the delegated stake is increased.
What Is A Stake Pool Saturation ?
Saturation is a term used to indicate that a particular stake pool has more stake delegated to it than is ideal for the network, and once a pool reaches the point of saturation it will offer diminishing rewards. The saturation mechanism was designed to prevent centralization by encouraging delegators to delegate to different stake pools, and operators to set up alternative pools so that they can continue earning maximum rewards. Saturation, therefore, exists to preserve the interests of both ada holders delegating their stake and stake pool operators.
The goal is to avoid any single pool becoming too large – thereby disincentivizing delegation to other pools – and receiving a disproportionate amount of the rewards. The health of the network is partly determined by having a high number of active stake pools with a balanced amount of stake delegated to them. The more numerous and geographically diverse the network’s pools, the better. Each stake pool’s saturation percentage is shown within the daedalus stake pool selection menu.