Leo Learn: Cardano

Leo Learn: Cardano

Gooooood day Lions I trust you are all safe and well with a roaring bull run things are starting to look a lot better this year. With the recent announcement that Cardano is launching their own stable coin, I thought this would be a really good segway into another wonderful Leo Learn article.

What is Cardano?

Cardano is a blockchain platform that was created in 2015 by IOHK (Input Output Hong Kong) research group and co-founder of Ethereum Charles Hoskins. It is based on a proof-of-stake consensus algorithm, which is designed to be more energy-efficient than the proof-of-work algorithm used by platforms like Bitcoin and previously Ethereum.

Cardano uses a unique two-layer structure, which allows for the separation of the settlement and computation layers of the blockchain. This design allows for greater flexibility and scalability, making it a promising platform for a wide range of applications.

Proof of Stake Consensus

One of the main strengths of Cardano is its use of a proof-of-stake consensus algorithm. In a proof-of-work system, miners use powerful computers to solve complex mathematical problems in order to validate transactions and add them to the blockchain. This process requires a significant amount of energy, which can be costly and environmentally damaging. In contrast, proof-of-stake systems rely on users holding and staking a certain amount of the platform's native cryptocurrency in order to validate transactions. This process is much less energy-intensive, making it a more sustainable and cost-effective option.

Another strength of Cardano is its unique two-layered structure. The platform is divided into two layers: the settlement layer and the computation layer. The settlement layer is responsible for managing transactions and maintaining the blockchain's ledger, while the computation layer is responsible for executing smart contracts and running decentralised applications. This separation allows for greater flexibility and scalability, as different aspects of the platform can be upgraded and improved independently.

Governance

Cardano also boasts a democratic governance model, which is designed to be more resistant to centralisation and manipulation. The platform uses a system called "Ouroboros," which allows stakeholders to vote on changes to the network and propose new features.

This allows for a more decentralised and democratic decision making process, which is an important aspect of blockchain technology. Cardano also has some weaknesses. One of the main weaknesses is that it is relatively new compared to other blockchain platforms, which means that it has not yet been widely adopted and has fewer users and developers.

Cardano's governance model has also been criticised for being overly complex and difficult to understand, which may make it less appealing to users and developers. However, Cardano has already seen some success in terms of partnerships and collaborations with the platform partnering with several organisations in Africa to develop a blockchain-based system for identity verification and financial services.

Pegged Stable Coin

Ada the governance token for the Cardano network saw a 5% price increase and a 14% trading volume increase at time of writing as news broke, of the networks planned stablecoin launch called Djed which will hit our wallets next week.

The Djed will remain a native stablecoin of the Cardano network for the interim as trust in stablecoins since the UST collapse is at record lows but that doesn't mean Cardano supporters aren't looking forward to the launch.

Are you a Cardano HODLR and looking forward to the networks stable coin launch? let us know how you feel about the new stablecoin in the comments section below.

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