What is Cardano (ADA)?
What is Cardano (ADA)?
Cardano is a revolutionary blockchain platform designed to transform how we manage data, transact, and build decentralized applications. Initially conceived as an evolution of the Ethereum network, Cardano aims to provide a more flexible, scalable, and environmentally friendly solution for smart contracts and decentralized finance applications.
Cardano at a glance
Launched in September 2017 by Charles Hoskinson, one of Ethereum’s co-founders, Cardano stands out as a third-generation blockchain platform. One of its strengths is the Ouroboros mechanism, the first consensus protocol with security properties proven through academic research. It was developed by cryptography experts from prestigious universities such as the University of Edinburgh and the University of Tokyo. The main objective of this innovation is to create a decentralized, scalable, secure, and energy-efficient environment.The ADA cryptocurrency
The native coin of the Cardano ecosystem, ADA, is named after mathematician Ada Lovelace, considered the world’s first computer programmer. Uses of the ADA cryptocurrency:- Fees and transactions: ADA is used to pay transaction fees on the network.
- Staking: Community members can stake ADA to help secure the blockchain and earn rewards.
- Governance: ADA allows holders to vote on network changes.
How does the Cardano blockchain work? The Ouroboros mechanism explained
How does the Cardano blockchain work? The Ouroboros mechanism explained
Unlike Bitcoin, which uses an energy-intensive algorithm (Proof of Work), Cardano uses a more eco-friendly method — Proof of Stake. More precisely, Ouroboros is the name of the consensus protocol used by Cardano.
What is Ouroboros?
Ouroboros is Cardano’s implementation of the Proof-of-Stake (PoS) consensus mechanism. Its name comes from the ancient symbol of the serpent eating its own tail, representing a continuous, self-sustaining cycle. In a blockchain context, this symbol reflects infinite growth — a value Cardano aims to embed in its network.The Ouroboros consensus mechanism allows participants to validate transactions, create new blocks, and secure the network in an energy-efficient way.Why is the Ouroboros mechanism important?
Unlike other consensus mechanisms, Ouroboros was the world’s first PoS protocol with mathematically proven security. It provides:- High security: Ouroboros relies on complex cryptographic calculations that effectively protect the network against attacks.
- Energy efficiency: Thanks to PoS, validating transactions requires far less energy compared to the Proof-of-Work (PoW) mechanism used, for example, by Bitcoin.
- Scalability: With each update, Ouroboros becomes faster and more performant, enabling the Cardano network to handle more transactions simultaneously without sacrificing decentralization.
How does Ouroboros work?
Ouroboros operates using a simple yet effective process:- Slot leader selection: Participants (called stake pools) are selected to create new blocks based on the ADA they hold and stake. The more ADA staked, the higher the chance of becoming a slot leader.
- Transaction validation: Slot leaders add new transactions into a block they validate, thus contributing to network security and decentralization.
- Rewards: Leaders receive rewards proportional to their contribution, incentivizing active participation in the network.
The evolution of Ouroboros
Since its launch, Ouroboros has been optimized and improved through several updates to enhance security, scalability, and performance. Key versions include:- Ouroboros Classic: The first version that introduced the foundation of the PoS mechanism.
- Ouroboros BFT (Byzantine Fault Tolerance): Increased resilience against byzantine attacks.
- Ouroboros Praos: Brought significant improvements to security and decentralization.
- Ouroboros Genesis: Allowed new nodes to join the network without the full historical blockchain.
- Ouroboros Leios and Ouroboros Peras (the latest): Designed to increase transaction speeds and reduce finality time.
- Cardano Settlement Layer (CSL) — dedicated to transactions and balance storage.
- Cardano Computing Layer (CCL) — where smart contracts and decentralized applications run.
What functions does Cardano perform?
What functions does Cardano perform?
Decentralized, transparent, and secure transactions
- Transparent transactions: All transactions with ADA and native assets are publicly recorded, ensuring full transparency.
- Secure data: Once a transaction is recorded, it cannot be modified or deleted, protecting data integrity.
- Fast, global transfers: No matter where you are, you can make quick and efficient transactions.
- Low costs: Transaction fees are relatively small, making Cardano a cost-effective option for anyone who wants to transact.
Host for smart contracts and decentralized applications (dApps)
Through the Plutus and Marlowe platforms, Cardano supports the development of smart contracts — functionality successfully introduced with the long-awaited Alonzo upgrade in September 2021.- Automated execution: Smart contracts execute code when specified conditions are met.
- Decentralized applications (dApps): From financial services to digital identity solutions, you can build any application on the blockchain.
- Flexibility and security: All smart contracts deployed on Cardano are secure and efficient.
Support for creating native assets
Cardano offers multi-asset functionality, making it possible to create custom assets directly on the blockchain.- Simplified creation: You don’t need complex smart contracts to mint tokens. Anyone can create their own tokens with specific rules (e.g., capped supply, transferability, etc.) directly via the Cardano protocol, without writing complex smart-contract code.
- Built-in security: Native assets benefit from the same security guarantees as the ADA cryptocurrency.
- Wide utility: Assets can be used for DeFi projects, rewards programs, and more.
Infrastructure for decentralized governance
A unique aspect of Cardano is its emphasis on decentralized governance.- Project Catalyst: ADA holders can use their voting rights to decide on future network developments.
- Transparency: The governance process is entirely public.
How much does ADA cost? ADA price history
How much does ADA cost? ADA price history
Launch period (2017–2018)
Cardano entered the market through an Initial Coin Offering (ICO) in September 2017 at a price of about $0.02 USD. Within just a few months, it saw its first spectacular surge. Alongside the crypto market bull run, ADA’s price reached $1.18 USD in January 2018. This early peak was driven by investor enthusiasm for Cardano’s proposed revolutionary technology.Bear market (2018–2020)
After the initial excitement, ADA entered a prolonged correction as the broader crypto market declined significantly.- After peaking in 2018, ADA’s price dropped sharply, trading below $0.10 USD for an extended period.
- In March 2020, during a market-wide downturn caused by the COVID-19 pandemic, ADA fell to around $0.02 USD.
Historic bull run in 2021
The year 2021 was memorable for Cardano, marking the moment when ADA pushed its limits, supported by innovation and a favorable market sentiment. In September 2021, ADA reached its all-time high (ATH) of $3.10 USD. The surge was fueled by technical innovations (smart contracts) and the growing adoption of the Cardano platform among investors.Entering the bear market and decline — 2022
After the upward curve of 2021, the crypto market entered a bear phase, affecting all cryptocurrencies, including ADA. Throughout 2022, ADA traded largely between $0.30 and $0.50 USD.Price stabilization trend (2023–2024)
In 2023, ADA saw a degree of recovery and price fluctuations, trading within a wider range but generally showing signs of stabilization compared to the sharp declines of 2022. In November 2024, as the crypto market was buoyed by a wave of enthusiasm attributed to Donald Trump’s return to the White House, most cryptocurrencies experienced dramatic increases. This broad rally also influenced ADA, which climbed from about $0.33 to $1.31, then closed the year at approximately $0.77.
Factors that influence ADA’s value
Factors that influence ADA’s value
Supply and demand
A fundamental economic principle is that an asset’s price is determined by supply and demand — ADA is no exception.- Rising demand: When more users want to hold or trade ADA, the price rises. This can be driven by partnership announcements or major developments on the Cardano network.
- Decreasing supply: If many users lock their coins in staking to earn rewards, the available market supply shrinks, which can lead to price increases.
Technological developments on the Cardano network
A unique characteristic of Cardano is its methodical, research-driven approach to technological development. New updates and features can attract both investors and users.- Smart contracts: Upgrades such as Alonzo, which introduced smart-contract functionality, generated massive interest.
- Scalability: Future developments like Hydra are expected to significantly improve transaction speed and network capacity, which could drive price appreciation.
Overall crypto-market sentiment
ADA’s price is strongly influenced by how the Cardano project — and the crypto market in general — is perceived:- Enthusiasm for crypto: When the market trends upward, ADA tends to rise alongside other major coins.
- Negative news: Conversely, adverse events — such as strict regulations in certain countries — can trigger rapid price drops in ADA.
Industry competition
Cardano competes directly with other blockchain platforms such as Ethereum, Solana, and Avalanche.- Adoption: If developers choose to build on Cardano over other platforms, confidence in the project grows.
- Technological performance: Compared to Ethereum, Cardano offers advantages like lower fees and greater energy efficiency — factors that can attract more developers.
Legal and regulatory challenges
Classifying ADA as a securityOne of the most important points of debate for Cardano has been the classification of the ADA token. In the United States, the Securities and Exchange Commission (SEC) began, starting in 2023, a series of lawsuits against major exchanges such as Binance and Coinbase. In these cases, the SEC included ADA on the list of cryptocurrencies it considered unregistered securities.This classification raised concerns among both investors and Cardano developers, with the following consequences:- Cardano Foundation and IOG’s position: Input Output Global (IOG), the company developing Cardano, together with the Cardano Foundation, strongly disputed the classification. They argue that ADA is a utility token and therefore does not meet the criteria defined in U.S. law for securities.
- Impact on exchanges: Following the SEC’s action, certain platforms — such as Robinhood — chose to delist ADA, likely to comply with prevailing regulations.
- Hoskinson claimed the decision-making process regarding the project was not transparent.
- Procurement procedures may have bypassed fairness and competitive standards.
A strong community
Cardano has one of the most active and loyal communities in crypto. Events organized by the Cardano Foundation or Charles Hoskinson (Cardano’s founder) are closely followed and influence perceptions of the project.
What are the advantages of investing in ADA (Cardano)?
What are the advantages of investing in ADA (Cardano)?
Cardano is one of the most popular choices for investors thanks to its long-term price growth potential and the ability to generate passive income.
ADA price appreciation
If demand for ADA grows over time — whether due to rising adoption, the success of the Cardano ecosystem, or positive market sentiment — the value of this cryptocurrency could increase.- Buy ADA at a lower price: Accumulate ADA when you consider the price attractive.
- Sell ADA at a higher price: After a significant rise, you can sell to realize profits.
Staking rewards
Cardano uses PoS, which means ADA can generate rewards without being traded. Through staking, you “lock” a number of ADA in a wallet to support the network and, in return, receive additional ADA.Benefits:- Passive income: A simple, effective way to grow your ADA holdings.
- Flexibility: ADA wallets often allow staking without hard locking, meaning you can withdraw whenever you want.
- Create a Cardano-compatible wallet (e.g., Daedalus or Yoroi).
- Choose a high-yield staking pool (avoid oversaturated pools).
- Delegate your funds to the chosen pool and watch your coin count grow.
Active trading of ADA
For those willing to spend time analyzing the market, active trading can be a profitable approach. ADA is available on most exchanges for day trading or short-term trading.Example trading strategies:- Short-term trading: Identify brief price surges to sell quickly and lock in profits.
- Arbitrage: Exploit price differences for ADA across different exchanges.
Participating in the Cardano ecosystem
- Providing liquidity on DEXs: Earn fees by supplying ADA in liquidity pairs on decentralized platforms.
- Lending: Use ADA to offer loans and generate passive income.
- Yield farming: Participate in yield-farming projects to earn additional ADA or other cryptocurrencies.
Running an ADA staking pool
For technically inclined investors and those holding significant amounts of ADA, operating your own staking pool can be highly profitable.Advantages:- Active earnings: As an operator, you receive a share of the rewards generated by your delegators.
- Contribution to the network: Validating transactions helps secure the blockchain and create new blocks.
How to buy ADA via the Abarai platform
How to buy ADA via the Abarai platform
Thinking of taking your first step into crypto and purchasing ADA (Cardano)? Here’s a step-by-step guide to making transactions quickly and safely.
What is Abarai?
Abarai is a cryptocurrency exchange platform with an intuitive interface, specifically designed to make buying and selling crypto as simple as possible.Why choose Abarai?
- Fast and anonymous transactions – Enjoy full anonymity for swap transactions. For transactions under 5,000 RON, you don’t need an ID, passport, or other documents — you only provide billing details.
- Full control over your funds – You decide where the crypto is sent.
- Low, transparent fees – You know exactly what you’ll pay from the start, with no hidden costs.
- Phone support in Romanian – Experts ready to assist you at every step.
- Maximum security – With Abarai, your funds aren’t stored on the platform. There’s no risk of them being frozen or lost due to hacking.
- Near-instant transactions – In just a few clicks, ADA is sent directly to your crypto wallet. The entire process finishes in just a few minutes!
Steps to buy ADA on Abarai
Step 1: Go to Abarai.roVisit Abarai.ro to get started. You don’t need to create an account.Step 2: Choose ADA as the coin On the homepage, select ADA (Cardano) from the list of available cryptocurrencies.Step 3: Enter the amountDecide how much ADA you want to buy or enter the amount of money you want to spend. The platform instantly shows how much ADA you’ll receive, including all fees.Step 4: Provide your wallet addressEnter the wallet address where you want to receive ADA.Step 5: Choose the payment methodThe platform offers several payment options:- Credit/Debit cards (including Apple Pay and Google Pay)
- Revolut Pay
- Bank transfer (SWIFT, SEPA)
- Keep your private key safe: Never share it with anyone.
- Enable two-factor authentication (2FA) wherever available.
- Avoid phishing links: Access your wallet only via official websites.
- Back up: Write down your recovery phrase and keep it safely offline.