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Cardano is a decentralized blockchain platform that uses proof of stake; ADA is its native currency. Its Ouroboros protocol selects stake pools to produce blocks in timed slots, while network nodes verify blocks and decide which valid chain to follow. ADA holders can delegate stake to a pool without transferring their coins or giving up their ability to spend them.
What are Cardano and ADA?
Cardano is the blockchain network and platform. ADA is the network’s native currency, used to pay transaction fees and for protocol rewards. The terms are related, but they are not interchangeable: Cardano is the system; ADA is the asset recorded and used on it.
Cardano describes Ouroboros as its proof-of-stake consensus protocol and says it was the first blockchain consensus protocol developed through peer-reviewed research. Cardano’s Ouroboros overview also characterizes proof of stake as more energy-efficient than proof of work; that is the project’s description, not an independently sourced comparison of energy use.
How does Cardano’s proof-of-stake system work?
Ouroboros organizes network time into epochs, each made up of slots. During a slot, a stake pool may be nominated to create a block. The nomination process is probabilistic: being nominated does not guarantee that a block will be created or accepted. Other nodes verify blocks and apply chain-selection rules, so consensus includes both block production and agreement about the valid chain.
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Epochs, slots, and nominations
Cardano’s node documentation describes a slot as one second and a current epoch as 432,000 slots, or five days. It also gives an average expectation of one nomination every 20 seconds, or 21,600 nominations per epoch. These are protocol quantities from Cardano documentation; nominations are not the same thing as accepted blocks. Cardano node documentation
Stake pools produce blocks
Stake-pool operators run nodes that help maintain the ledger and process transactions into blocks. Ouroboros selects slot leaders with selection influenced by the stake controlled by pools. ADA holders can delegate stake to a pool, increasing the stake associated with that pool and therefore influencing its chance of selection. Protocol incentives are intended to discourage delegators from concentrating stake in already-large pools.
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Verification and settlement
A newly created block is not instantly irreversible. Cardano’s consensus overview describes recent blocks as transient until a settlement delay has passed. In practical terms, a transaction appearing in a recent block should not be treated as final in the same way as one that has had time to settle under the network’s chain-selection process. Cardano’s Ouroboros overview
What does delegating ADA mean?
Delegation assigns stake to a pool for protocol purposes; it does not transfer the ADA to the pool operator. The holder retains spending power and can use the ADA. Delegation is therefore distinct from sending coins to a pool as a custody arrangement. Cardano’s delegation guide explains the mechanics and reward flow. Cardano delegation documentation
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How staking rewards are determined
Rewards are not fixed or guaranteed. Cardano says they depend on pool performance and network parameters. Pool costs and the operator’s margin are deducted before the remaining rewards are shared between delegators and pool owners. The outcome depends on the pool and protocol conditions rather than a universal promised yield. Cardano delegation documentation
How Cardano transactions and smart contracts work
Cardano uses an extended unspent transaction output model, usually shortened to EUTXO. In a basic UTXO system, a transaction consumes previously unspent outputs and creates new outputs. Cardano extends that structure by allowing scripts in addresses and additional data in outputs, a design that supports smart contracts.
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This differs from account-based blockchain models, so developers should not assume that smart-contract patterns transfer unchanged between the two. Cardano’s documentation describes local transaction validation and predictable execution costs as design properties of EUTXO; those descriptions are not independent comparative performance tests. Cardano EUTXO documentation
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How Cardano governance works
Cardano’s governance documentation identifies delegated representatives (DReps), stake-pool operators, and a constitutional committee as participants in governance. ADA holders can delegate voting rights to a DRep or register as a DRep, and an ADA owner can submit governance actions. Which bodies must ratify a particular action depends on its type and the governance state. Cardano governance documentation
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Cardano’s development overview identifies Conway as part of the Voltaire governance phase and says Plomin completed the governance feature set described there. Governance and upgrade status can change, so consult the current documentation for the state of a later upgrade rather than treating roadmap labels as permanent. Cardano development overview
How does proof of stake differ from proof of work?
| Aspect | Cardano proof of stake | Proof of work |
|---|---|---|
| Block-producer selection | Stake pools are nominated as slot leaders, with selection influenced by stake. | Participants compete through computational work to produce blocks. |
| Network resources | Uses stake-pool nodes and stake-based participation rather than mining competition; Cardano documentation characterizes proof of stake as more energy-efficient. | Requires computational competition among participants; the sources cited here do not provide a like-for-like energy measurement. |
| Chain agreement | Nodes verify blocks and apply Ouroboros chain-selection rules; recent blocks settle over time. | Proof-of-work systems use their own validation and chain-selection rules; details vary by protocol. |
The comparison is about protocol design, not a claim that all proof-of-stake or proof-of-work networks behave alike. Cardano’s project documentation supports the description of its own process and its characterization of energy efficiency, but does not establish a universal quantitative advantage for every network. Cardano’s Ouroboros overview
What a Cardano wallet does
A wallet manages the keys used to authorize ADA transactions; it does not physically contain ADA. The blockchain keeps the network records. Cardano’s wallet guide describes hardware wallets and names Trezor Model T, Ledger Nano S Plus, and Ledger Nano X. Check current device support and model compatibility with the wallet software you plan to use before choosing a device. Cardano wallet guide
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