Cardano (ADA)

Cardano (ADA) is the native cryptocurrency of the Cardano blockchain, a proof-of-stake network that supports payments, smart contracts and on-chain governance. ADA pays transaction fees, is delegated to stake pools to secure the network, and gives holders a vote on how the system changes and how its treasury is spent. Its smallest unit is the lovelace, one millionth of an ADA, and the coin is named after the mathematician Ada Lovelace.

ADA is the coin, and Cardano is the network, although the project's name is often used for both. Cardano was co-founded by Charles Hoskinson, a co-founder of Ethereum, and is developed by several organisations, chiefly Input Output, the Cardano Foundation and Emurgo. It is known for building on peer-reviewed academic research, which supporters see as rigour and critics as slowness.

Picture a cooperative whose members keep a shared account book. Instead of hiring guards, the cooperative lets members back the record-keepers they trust with their own savings, which never leave their pockets. Record-keepers who do the job well earn fees and new coins, and pass most of that on to the members who backed them.

The cooperative also has a common savings jar. A small share of every reward goes into it, and members now vote, directly or through representatives, on how the jar is spent and on changes to the rules. ADA is the money of this cooperative: it pays for each entry in the book, earns rewards for those who back a record-keeper, and counts as a vote when decisions are made.

Hoskinson and Jeremy Wood founded the company behind Cardano, now Input Output, in 2015. ADA was sold to investors, mostly in Japan, in 2015 to 2017, and the network launched in September 2017. Development has proceeded in named eras. The Shelley upgrade of 2020 let holders delegate ADA to stake pools, and the Alonzo hard fork in September 2021 added smart contracts. The Chang hard fork on 1 September 2024 introduced on-chain governance, and the Plomin hard fork in January 2025 completed it, letting holders vote on treasury withdrawals, constitutional changes and the membership of a constitutional committee. Each upgrade is a planned fork that all nodes adopt.

Cardano's consensus protocol, Ouroboros, chooses which stake pool produces each block in proportion to the ADA delegated to it. Holders join staking pools through delegated staking: the ADA stays in their own wallet, can be spent at any time and cannot be slashed. Rewards are paid every epoch of five days. Instead of an account model like Ethereum's, Cardano extends the UTXO model used by Bitcoin so that outputs can carry data and smart-contract logic, which makes the cost of a transaction predictable before it is sent. Native tokens can be created without a smart contract, and a layer 2 system called Hydra is designed to add capacity.

ADA has a hard cap of 45 billion coins. Those not yet in circulation sit in a reserve, and each epoch a fixed share of the reserve is released to pay staking rewards, so new issuance falls over time:

• $\rho$ is the monetary expansion rate, set at 0.3\% per epoch.
• $\text{Reserve}$ is the ADA not yet issued, the gap between 45 billion and the current supply.
• A share $\tau$, set at 20\%, of the released ADA plus fees goes to the treasury; the rest goes to stake pools and delegators.

For example, with a reserve of 7 billion ADA, one epoch releases $0.003 \times 7{,}000{,}000{,}000 = 21{,}000{,}000$ ADA. Ignoring fees, $0.2 \times 21{,}000{,}000 = 4{,}200{,}000$ ADA goes to the treasury and 16.8 million is shared among stakers. Next epoch the reserve is smaller, so less is released.

• Fees and staking. ADA pays every transaction and earns rewards when delegated to a pool.
• Governance. Holders vote directly or through delegated representatives on proposals, under a governance system that also involves stake pool operators and a constitutional committee.
• Applications. Cardano hosts decentralized finance applications and native tokens, though on a smaller scale than Ethereum or Solana.
• Investment. ADA has often ranked among the ten largest cryptocurrencies by market value.

In 2023 the US Securities and Exchange Commission named ADA as a security in lawsuits against the exchanges Binance and Coinbase; both cases were dropped in 2025. In the European Union, firms offering ADA fall under MiCA. The most common criticism of Cardano is that its research-first approach delivered features such as smart contracts years after rivals, and that activity on the network has remained modest relative to ADA's market value. Others question whether on-chain governance can avoid being dominated by large holders and the founding organisations.

• Cardano
• Cardano documentation