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Cardano (ADA): An Investigation-Heavy Background and Roadmap
Cardano (ADA) is democratizing the process of agreement and governance. Cardano’s ultimate goal is to enable economic empowerment for those in greatest need.
Overview
Introduced in 2017, Cardano is an open-source blockchain protocol named after Italian polymath Gerolamo Cardano. The native Cardano (ADA) coin is named after English mathematician Ada Lovelace. These two names' scientific connotations reflect the project's research-driven ethos and its focus on applying sophisticated technical theory to the blockchain world. Cardano has a unique two-layer structure, and the network uses a proprietary adaptation of Proof-of-Stake (PoS) consensus called Ouroboros. ADA is used for smart contracts and transactions, as well as for user participation in Cardano's decentralized governance decisions. Additionally, the ADA coin helps fund research, development, and business adoption of blockchain technology. Current and potential use cases for this high-throughput blockchain include transactions, smart contracts, IoT, DeFi, inventory tracking, NFTs, and dApps.
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What Is Cardano?
Cardano is a blockchain-based social and financial operating system. Created by a global team of leading academics and engineers, Cardano is a platform for developing new technologies, exploring new forms of interaction, and establishing new work methods.
Since the release of its Byron mainnet in 2017, Cardano has been continuously evolving. In its early stages, Cardano aimed to disrupt the way blockchains achieve consensus. This was achieved through its unique Ouroboros Proof-of-Stake (PoS) algorithm, which introduced a new level of energy efficiency for block validation. Shelley, an update designed to democratize consensus and governance, was released to empower the community.
Cardano has developed a blockchain that is significantly more environmentally friendly than earlier Proof-of-Work (PoW) blockchains. It also offers unmatched security and decentralization through cryptographic proofs, formal verification, and over a thousand community-led staking pools.
The Cardano Foundation: Development and Decentralization
Responsible for overseeing the Cardano blockchain, the Cardano Foundation is a Swiss not-for-profit organization committed to empowering innovators and change-makers in the blockchain industry.
The Cardano Foundation is dedicated to a blockchain-enabled future built on inclusiveness and transparency. As an independent entity, the foundation aims to empower those shaping the decentralized era, set governance directions, and enable economic empowerment.
One of the Cardano Foundation's main goals is to decentralize control. Despite being one of the most decentralized blockchains globally, some entities still have direct control over critical aspects of the blockchain. Alongside its ecosystem partners, the Cardano Foundation is working to democratize access to Cardano's open-source infrastructure, transfer protocol control to the community, and help enterprise users utilize Cardano's powerful solutions.
EMURGO: Enterprise Adoption and Utilization
As one of Cardano's founding entities, the EMURGO team aims to facilitate the mainstream adoption of blockchain technology. They encourage governments, companies, universities, and other groups to leverage Cardano's broad functionality, high security, and extensive transactional throughput.
EMURGO is collaborating on various use cases, including projects focused on:
- Tamper-proof document verification
- Internet of Things (IoT)
- Decentralized finance (DeFi)
- Anti-counterfeiting solutions for retail
- Inventory tracking
IOG: Fundamental Blockchain Research and Engineering
Another founding member of the Cardano ecosystem, IOG (formerly IOHK), is a blockchain engineering company responsible for updating Cardano's codebase and achieving roadmap goals. Established in 2015, IOG focuses on formal methods and peer-review, publishing numerous papers supporting Cardano and the broader blockchain industry at academic conferences.
IOG collaborates with researchers and engineers at leading institutions worldwide to build Cardano on solid fundamentals and reliable, verifiable code. This engineering approach, similar to that used in critical infrastructure for spacecraft and high-frequency trading software, has contributed to the robustness of the Cardano protocol and its applications.
In addition to leading research and engineering for Cardano, IOG explores collaborations with industry partners. One successful pilot is with Beefchain, a cattle-traceability solution using a Cardano-based inventory tracking solution called Atala Trace. Other projects are being explored in the luxury goods market and beyond.
Cardano's Structure and Consensus Algorithm
Cardano has a two-tiered structure: the Cardano Settlement Layer (CSL) and the Cardano Computational Layer (CCL). The CSL, known as the Byron era, enables the transfer of the native Cardano (ADA) cryptocurrency among blockchain participants. It also records transactions immutably, similar to other Layer-1 cryptocurrencies like Bitcoin.
The CCL is a separate layer, consisting of multiple components released during the Shelley and Goguen eras, enabling tokenization, smart contracts, and decentralized applications (dApps). Interoperability and an agile deployment environment are crucial to the Cardano ecosystem, and engineers are constantly seeking ways to onboard new participants by deploying domain-specific languages and cutting-edge software development kits (SDKs).
Cardano's proprietary Proof-of-Stake consensus protocol, Ouroboros, is one of the project's most groundbreaking achievements. Ouroboros is the first scientifically peer-reviewed and independently audited and verified PoS algorithm.
Ouroboros achieves consensus and validates transactions by allowing ADA coin holders to delegate to a stake pool, which functions as a node on the Cardano blockchain. Each node has the opportunity to be elected as a slot leader and validate a block, with the likelihood increasing according to the amount of ADA staked to their pool, up to the pool saturation point. Stake pools receive rewards for successfully validating blocks, which are then distributed to delegates, allowing participants to earn ADA for participating in consensus.
Ouroboros divides blocks into epochs, each lasting five days. Epochs are further divided into smaller increments called slots, each lasting 20 seconds. Each slot randomly assigns a slot leader, who adds a block to the Cardano blockchain for their assigned slot and receives newly minted ADA in return.
Cardano's Programming Languages
Cardano (ADA) was the first blockchain protocol to use Haskell, a purely functional programming language. Haskell and other functional programming languages, typically used in academia and high-importance software development, are considered more precise, formally verifiable, and better suited for high-assurance applications.
Cardano's unique smart contract programming languages, Plutus and Marlowe, are provided as a set of libraries for Haskell. They leverage existing Haskell documentation, toolkits, and a professional community to build secure and enterprise-grade smart contracts. This enables Plutus and Marlowe smart contracts to be implemented carefully in a precise, formally verified code, providing a high level of assurance from the outset.
In November 2020, IOG sponsored a nonprofit initiative to promote the adoption and use of Haskell. To encourage non-technical users to create smart contracts and dApps on Cardano, IOG is also developing domain-specific languages (DSLs). These DSLs will enable subject-matter experts, such as finance professionals, to easily write and deploy smart contracts in a visual programming language environment without writing complex code.
ADA and Cardano's Future
Looking ahead, Cardano has identified three key components and missions critical to its long-term success. First, the Cardano blockchain will explore new ways to represent value on-chain through the introduction of native tokens and the
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