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What is Cardano (ADA)?

Cardano (ADA) is a cryptocurrency and an operating system for smart contracts and decentralized applications (apps).  Cardano’s founder, Charles Hoskinson, is one of the most well-known individuals in the crypto industry. Shelley, Mary, Alonzo, and Vasil hard forks have been the most significant updates for Cardano in recent years.

From a technical perspective, Cardano is a two-tiered blockchain system known as a layered one. Cardano utilizes a Proof of Stake consensus algorithm called Ouroboros. The maintenance of the Cardano blockchain is carried out by validators who stake ADA tokens.

The future of Cardano looks promising.

What is Cardano (ADA)?

Cardano (ADA) is a cryptocurrency and an operating system for smart contracts and decentralized applications (dapps). Cardano is a smart contract platform competing with Ethereum, BNB Chain, Solana, and Avalanche.

Cardano stands out from its competitors because of its academic approach. The Cardano project had been running for years before a single line of code was written. The founder of Cardano, Charles Hoskinson, has led the project with his unique style that has brought Cardano a lot of fans.

ADA is the native token of Cardano. It is used for paying transaction fees in the Cardano ecosystem. The ADA token is also used for staking in Cardano’s Proof of Stake consensus. Staking means locking tokens for the blockchain maintenance work.

Basic information about Cardano (ADA):

Category Smart contract platform
Ticker ADA
Max supply 45 billion ADA
Circulating supply 35 billion ADA
All-time high (date) $3.10 (Sep 02, 2021)
All-time low (date) $0.01735 (Oct 02, 2017)

You can find the up-to-date price of Cardano (ADA) on this page: Cardano’s price.

In summary, Cardano has solidified its position as one of the top 10 cryptocurrencies in the market in recent years. It still faces many challenges, but the project has garnered a strong community and fan base.

The history of Cardano

Cardano’s founder, Charles Hoskinson, is one of the most well-known individuals in the crypto industry. Many assume that Hoskinson is significantly older but was born in 1987. Hoskinson is mathematically gifted and has studied cryptography and mathematics at the University of Denver and the University of Colorado.

Despite his young age, Hoskinson has been involved in many ventures. He first encountered cryptocurrencies in 2011. He focused mainly on mining and quickly grasped the significance of cryptocurrencies on a larger scale. His eyes were genuinely opened after the 2013 banking crisis in Cyprus.

Hoskinson is also one of the co-founders of Ethereum. He was part of Vitalik Buterin’s core team and helped to launch the market’s most popular smart contract platform. Eventually, due to differences in the project’s development, Hoskinson diverged from Ethereum and parted ways with the platform.

Charles Hoskinson made a big move in 2015. This was when he founded IOHK (Input Output Hong Kong) with Jeremy Woods. This is the most critical part of Cardano because IOHK is the company in charge of the development work.


IOHK won’t run Cardano forever. The idea is to guide the project to the Voltaire phase. After that, the community will vote for Cardano’s future.

Cardano’s native token ADA was created through an ICO in 2017, like almost all coins. Nearly 95 percent of early investors were Asian. The idea back then was to build the “Ethereum of Japan” and intensely focus on the Asian market. We’ll look at ADA’s price development in a separate chapter.

Nothing significant happened in the Cardano project during the 2018-2019 bear market. The most important updates have been seen in 2020-2022, which will be reviewed next.

Cardano hard forks

Shelley, Mary, Alonzo, and Vasil hard forks have been the most significant updates for Cardano in recent years. These updates have transformed the Cardano ecosystem from its beta phase into a fully-fledged smart contract platform. Let’s now go through the key events one by one.

Shelley hard fork

The first major hard fork occurred in July 2020 when the long-awaited Shelley update was launched. It brought staking to Cardano’s MainNet. Staking has been a huge success since it was introduced. There are over 3000 staking pools worldwide, and over 70% of the ADA tokens in circulation are staked.

Staking fundamentally changed the structure of the whole ecosystem. It moved Cardano’s blockchain to the management of thousands of staking pools. Shelley is one of the most significant updates. It also transitioned from the Byron phase of the roadmap to the second phase.

Mary hard fork

The Mary hard fork in March 2021 was an essential step in the Shelley phase of the roadmap. A dedicated token standard was activated in the Cardano blockchain. Users were able to issue tokens in the ecosystem. This meant NFT support in practice.

Cardano differs significantly from Ethereum and its ERC20 token standard. Due to its exceptional architecture, no smart contracts are needed to transfer tokens on the Cardano platform.

Alonzo hard fork

The Alonzo hard fork, completed in September 2021, was the most exciting in Cardano’s history. Its timing coincided with the final stages of the cryptocurrency bull market, which also caused a huge price jump for the ADA token. At the same time, the whole ecosystem moved from the Shelley phase to the third phase of the roadmap, called Goguen.

The Alonzo hard fork activated smart contracts on Cardano. This made Cardano theoretically a full-blooded smart contract platform and, at the same time, turned Cardano’s ADA token from speculation into a more tangible investment.

Ultimately, Alonzo’s hard fork was a disappointment, at least for investors. Many found that Cardano was not technically compliant with the requirements of DeFi applications, which is why Cardano’s DeFi ecosystem did not take off as expected.

Vasil hard fork

The Vasil is the most important and demanding if the Alonzo hard fork was Cardano’s most anticipated upgrade, at least if you ask founder Charles Hoskinson, who says that around half a million hours of programming went into the Vasil update.

Vasil addresses the limitations that have emerged since the Alonzo hard fork. It significantly improves the transaction capacity of Cardano and also brings updates to the Plutus programming language. Vasil is the update that investors expected Alonzo to be.

The Vasil hard fork was completed in September 2022, several months behind the original schedule. This article was updated a few days after the Vasil hard fork, so its broad implications are unknown.

The Cardano roadmap can be found at At the time of writing, we are in the Basho phase. Bryon, Shelley, and Goguen have passed already.

Cardano’s two-tier system

From a technical perspective, Cardano is a two-tiered blockchain system known as a layered one. These tiers are called the Cardano Settlement Layer (CSL) and the Cardano Computation Layer (CCL). provides background information on this solution:

We have chosen the position that the accounting of value should be separated from the story behind why the value was moved. In other words, separation of value from computation. This separation does not mean that Cardano will not support smart contracts. On the contrary, by making the separation explicit, it permits significantly more flexibility in the design, use, privacy and execution of smart contracts. (Source:

cardano layers

CSL is the layer where the Cardano blockchain is run. All ADA transactions are processed on this level. The blockchain is maintained using a Proof of Stake consensus algorithm called Ouroboros. The CSL layer also handles custom-made tokens and NFTs.

CCL is the computation layer. This is where Cardano smart contracts are run. They are programmed using the Plutus language. Separating transactions from computations is beneficial when the platform is updated in the future.

A good example of this architecture was in the spring of 2021 when the Mary hard fork was executed. It enabled custom-made tokens and NFTs on Cardano. This was possible even without smart contracts. In Ethereum, transactions and computations are done on the same layer. Transactions cannot be done without using smart contracts.

In general, it’s important to understand the approach chosen by Hoskinson. Years of academic research were done for Cardano before writing a single line of code. This approach has been significantly slower than its competitors’ “build & break” approach. Cardano is finally catching up.

Cardano’s consensus algorithm Ouroboros

Cardano utilizes a Proof of Stake consensus algorithm called Ouroboros. Validators in the Ouroboros blockchain maintain the network by staking ADA tokens, which means they lock them up for some time. Proof of Stake has become the preferred choice in the platform category in recent years, replacing the resource-intensive Proof of Work that requires physical mining.

cardano ouroboros

In the Ouroboros system, time is divided into units called epochs. These epochs are further divided into slots, which are configurable time units. Each slot represents approximately 20 seconds. One epoch lasts 120 hours or five days, consisting of 432,000 slots.

Since a Proof of Stake system does not involve mining, the producers of new blocks in the blockchain are chosen from among the stakers of ADA. You can become a block producer in the Cardano system by holding sufficient ADA tokens. The entity that is selected as the block producer is called a slot leader. A new slot leader is assigned after every slot.

Cardano staking

The maintenance of the Cardano blockchain is carried out by validators who stake ADA tokens. The staking on Cardano has become incredibly popular in recent years. The figures are undeniably impressive. We can safely say that staking is also decentralized.

Cardano stakingInfo
Delegators 925,504
Pools 3,114
Staking ratio 65%

Cardano staking became popular instantly after it was launched on the MainNet. This happened in the summer of 2020. Thousands of community members had already participated in the TestNet.

If you own ADA and want to participate in staking, there are two options. You can run your staking pool or delegate your tokens to an existing one. This is roughly how other Proof of Stake platforms work as well. You can either become a validator or delegate.

ADA staking can be quickly done using one of Cardano’s wallets (Daedalus). Other wallet manufacturers support ADA staking, too. One of the popular ones is Exodus. In practice, you are delegating your ADA. It’s so easy. Even an amateur can do it with a couple of clicks.

There is a lot of information about Cardano staking on YouTube and Google. Note for Scandinavian readers: Norwegian Block Exchange (NBX) has Cardano staking.

Overview of Cardano

The future of Cardano looks promising. Charles Hoskinson’s project has come a long way, but the most critical steps are yet to come.

The Vasil Hard Fork, conducted in the fall of 2022, addressed many of the shortcomings of the Alonzo Hard Fork. It finally made Cardano a fully-fledged smart contract platform. With no more technical limitations hindering application development, investors anticipate growth, especially in the DeFi sector.

Time will tell whether Cardano’s EVM incompatibility becomes a significant obstacle. Most developers are proficient in Solidity, where EVM-compatible platforms like BNB Chain and Avalanche come into play. They seek to attract attention from Ethereum by offering an easy way to migrate applications to their platforms.

Cardano currently lacks this option. Its Plutus programming language may pose a growth limitation. Whether Cardano is a better or worse investment compared to the aforementioned smart contract platforms or Ethereum is difficult to answer at the time of writing. Cardano’s market cap is roughly in the same ballpark as its competitors, suggesting it is neither significantly overvalued nor undervalued.

The growth of the DeFi sector is crucial for Cardano’s future. It is also essential for its launched Djed stablecoin to gain sufficient popularity and support within the Cardano ecosystem.

To buy Cardano, refer to this article: How to buy Cardano (ADA). It provides detailed instructions on acquiring Cardano’s ADA token and other useful information about Cardano as an investment.

Cardano’s Milkomeda

Milkomeda is a pioneering protocol that serves as a bridge, connecting Cardano, a non-EVM (Ethereum Virtual Machine) blockchain, to the vast EVM ecosystem. At its core, Milkomeda employs EVM Rollups and advanced Layer 2 solutions. These Rollups are designed to execute smart contracts off-chain, ensuring that the primary blockchain remains secure and decentralized while benefiting from the capabilities of the EVM.

One of the standout features of Milkomeda is the C1 EVM Rollup. This integration is a game-changer for Cardano. With C1, Cardano can now harness the power of the EVM, enabling developers to create and run smart contracts on Cardano as seamlessly as they would on Ethereum. This means that DApps and projects initially designed for Ethereum can now be ported to or interact with Cardano, expanding the reach and potential of both ecosystems.

Milkomeda has numerous benefits:

  1. Interoperability: Milkomeda breaks down barriers, allowing Cardano to interact with a broader range of decentralized applications and services initially built for Ethereum.
  2. Efficiency: By processing multiple transactions off-chain, Milkomeda significantly boosts transaction speeds. This means faster interactions and responses for users and developers alike.
  3. Cost-Effective: One of the challenges in the blockchain space is the fluctuating and sometimes high gas fees. With Milkomeda’s off-chain processing, gas fees on Cardano can be substantially reduced, making transactions more affordable.
  4. Expansion of Cardano’s Ecosystem: With the ability to tap into the EVM’s functionalities, Cardano can attract a wider range of developers and projects, enriching its ecosystem and increasing its adoption in the decentralized world.

In summary, Milkomeda is not just a bridge; it’s a gateway that unlocks many opportunities for Cardano, propelling it to new heights in the blockchain domain.

Antti Hyppänen

Antti Hyppänen is the founder and editor-in-chief of Antti has written articles about cryptos since 2017. He follows the crypto market every day of the year and is responsible for the daily operations of AboutBitcoin. Antti is not a maximalist regarding any cryptocurrency but looks at the industry objectively. Antti’s investment profile is “buy & hold,” i.e., he does not trade or use leverage. His crypto portfolio consists of mainly Bitcoin and Ethereum. Antti also follows macroeconomic events. In addition to cryptos, his interests include gold, silver, and the US stock market.