How It Works
Cardano's Ouroboros protocol divides time into epochs (5 days) and slots (1 second), with slot leaders elected probabilistically based on ADA stake. The eUTXO model extends Bitcoin's UTXO with datum and redeemer fields, enabling smart contracts without the shared state risks of the account model. Plutus smart contracts compile to Untyped Plutus Core and run on the EUTXO ledger. The Hydra Layer 2 provides isomorphic state channels that process ADA off-chain at theoretical throughput of 1 million TPS per head. The Chang hard fork (2024) completed the Voltaire governance era, giving ADA holders on-chain voting over protocol changes.
Consensus Mechanism: Proof of Stake (Ouroboros)
Proof of Stake consensus selects block proposers based on the amount of cryptocurrency staked as collateral. Validators risk losing their stake (slashing) if they act dishonestly, creating economic security without energy expenditure. Stake-weighted selection means larger stakers have proportionally greater influence on block production.
Key Architecture Facts
| Category | Layer 1 |
| Consensus | Proof of Stake (Ouroboros) |
| Launched | 2017 |
| Founder | Charles Hoskinson |