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Cardano and ADA: what the network does

Cardano is a proof-of-stake blockchain. ADA is its coin for fees and staking. It uses Ouroboros, an extended UTXO model and on-chain governance in 2024.

Vahe HakobyanEditor-in-chief Updated Oct 6, 20263 min readFact-checked

Illustration: World-Crypt

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What is Cardano used for?How does Cardano work?Who created Cardano?How is Cardano different?What legal issues has Cardano faced?FAQ

Key takeaways

Ouroboros proof-of-stake lets ADA holders delegate to stake pools.
EUTXO tracks outputs and runs smart contracts.
SEC lawsuits in June 2023 named ADA as an alleged security.

Short answer

Cardano is a proof-of-stake blockchain, and ADA is its coin for fees and staking. People use it to send ADA, stake, vote, and create tokens and apps.

Cardano is not the same as ADA. Cardano is the network, and ADA is the asset on it. Its design stresses peer-reviewed research.

What is Cardano used for?

Cardano at a glance

What it is: Public decentralized blockchain platform
Native asset: ADA
Development began: 2015
Public release: 2017
Created by: Charles Hoskinson and Jeremy Wood

People use ADA to send value and pay fees. They can stake ADA and vote on governance. Cardano also supports tokens and smart contract apps.

Common uses
Use	What happens
Sending ADA	Send ADA and pay a fee.
Staking	Delegate ADA to a pool.
Tokens and apps	Issue tokens or run apps.

How does Cardano work?

Cardano runs on Ouroboros, its proof-of-stake protocol. The ledger uses an extended UTXO model, called EUTXO. Stake pools confirm transactions, and ADA holders can delegate stake.

Ouroboros chooses block producers based on delegated stake.
EUTXO treats each transaction output as a separate entry for smart contracts.

Who created Cardano?

Charles Hoskinson and Jeremy Wood outlined Cardano in 2015. Hoskinson had left Ethereum in 2014. They co-founded IOHK, and Cardano launched in 2017. Its founding groups were IOHK, the Cardano Foundation and Emurgo. Today Input Output Global, the Foundation, Emurgo and the community develop it. In 2024, the Chang upgrade added on-chain governance.

How is Cardano different?

Cardano shares proof-of-stake with Ethereum but uses a different ledger model from Bitcoin. Bitcoin uses proof-of-work for payments. Ethereum uses accounts for smart contracts.

Cardano compared
Feature	Bitcoin	Ethereum	Cardano
Consensus	Proof-of-work	Proof-of-stake since 2022	Ouroboros proof-of-stake
Ledger	UTXO	Accounts	Extended UTXO

What legal issues has Cardano faced?

US regulators have addressed ADA mostly through broader lawsuits. In June 2023, the SEC named ADA among assets it alleged were securities in cases against Binance and Coinbase.

Frequently asked questions

Store ADA in a Cardano wallet that lets you control your keys and supports staking. Daedalus keeps a full record of the blockchain.

It is a Swiss nonprofit that supports the Cardano ecosystem and community governance.

A native token is issued on Cardano without a separate smart contract. It uses the same ledger rules as ADA.

Yes. ADA has a maximum supply written into its protocol, so no new ADA is created beyond that cap.

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Written byVahe HakobyanVahe Hakobyan is the editor-in-chief of World-Crypt. He covers bitcoin, markets and regulation, and leads the newsroom that fact-checks every story before it goes live.

What is Cardano used for?

How does Cardano work?

Who created Cardano?

How is Cardano different?

What legal issues has Cardano faced?

Frequently asked questions

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