What is Cardano (ADA)?
Cardano is a decentralized, 3rd generation PoS (proof-of-stake) blockchain platform and ADA is the token of the Cardano blockchain. It was designed from the ground up by a team of top engineers and academic experts.
Cardano is a completely open source project with a focus on sustainability, scalability, and transparency, with the goal of ensuring equitable access to finance, insurance, and more for all those who currently do not have access to financial infrastructure. Cardano’s PoS consensus protocol is called Ouroboros.
Cardano is a project founded by Charles Hoskinson. His enthusiasm for making it a global financial infrastructure is discussed a lot in the following video. I was also attracted to Cardano after watching this. There are also Japanese subtitles, so please take a look.
Major Development Companies
Cardano is being developed by the following three companies, but as it is an open source project, Catalyst allows anyone to propose a proposal and participate in the development of Cardano with funding from the ADA.
- Cardano Foundation:Cardano Foundation, an independent standards body that monitors and oversees the progress of Cardano and the Cardano ecosystem
- IOG:IOG is a technology and engineering company building cryptocurrencies and blockchains for academic, corporate and government institutions
- EMURGO:Cardano’s for-profit arm, EMURGO, evolves its platform and promotes recruitment through commercial ventures
What is Cardano’s (ADA) PoS protocol Ouroboros?
Ouroboros is the first provably secure proof-of-stake protocol and the first blockchain protocol based on research developed after writing a paper and then having it peer-reviewed by the world’s most prestigious conferences.
PoS?
There are two major blockchain protocols: proof-of-stake (PoS) and proof-of-work (PoW). These protocols are consensus algorithms for distributed networks. They are rules that govern how a network of thousands of nodes agree on additions (blocks).
Proof-of-stake is a more sustainable solution that answers the performance and energy use challenges of proof-of-work. Instead of relying on “miners” to solve computationally complex equations to create new blocks, it rewards those who do it first.
How does Ouroboros work?
Ouroboros processes transaction blocks by dividing them into epochs, and epochs are further divided into time slots.
For each slot, a stake pool is assigned as the slot leader and is rewarded for adding blocks to the chain; ADA holders do not have to operate their own pool, but can delegate their ADA to a stake pool, such as the Camp Fire pool, and be rewarded when that pool is selected as slot rewarded if they are selected as the leader.
The Proof of Stake selects a participant (in Cardano’s case, the stake pool) and is rewarded if that pool generates a block.
The pool that generates the blocks is automatically calculated based on the amount of stakes. Pools with more delegation generate more stable pools, while pools with less delegation tend to generate blocks irregularly and earn more per block.
In addition, when a pool is saturated with a certain amount of rewards, the rewards are reduced. By doing so, the system allows ADA holders to spread out and delegate to other pools.
By delegating to pools with smaller amounts of delegation, ADA is distributed and security is improved.
Cardano’s PoS consumes up to 4 million times less energy than Bitcoin’s PoW
Ouroboros solves the biggest challenge facing existing blockchains. That is that it requires more energy to achieve consensus.
With Ouroboros, Cardano can scale securely, sustainably, and ethically with up to 4 million times the energy efficiency of Bitcoin.
Proven safety
Ouroboros features mathematically verifiable security against attackers.
The protocol is guaranteed to be secure as long as 51% of the wager (ada in the case of Cardano) is held by an honest participant. This is accomplished through random leader selection, in addition to other new concepts. The protocol continues to evolve through new iterations and rigorous security analysis.
Advantages and Features of Cardano (ADA)
Based on academic research and developed specifically for safety
Cardano is the first blockchain protocol based on research that was developed after writing a paper and then peer-reviewed by some of the most prestigious conferences in the world. And it has been developed through a process of testing and validation, rather than being released quickly. It is a project that sometimes takes a long time to launch, but it is being developed with the highest priority on security and sustainability to become a global infrastructure.
All research papers and technical specifications supporting Cardano are publicly available, and all Cardano development activities are posted online.
Cardano uses the functional programming language Haskell for safety and correctness
Cardano is written in Haskell, a secure functional programming language, and Haskell is often used to develop highly reliable systems.
Therefore, Haskell is a programming language used to build critical systems in areas such as finance, security (e.g., building certification authority servers and security infrastructure), science, and medicine.
High security
Ouroboros (Cardano PoS protocol) guarantees strict security. It is built through peer-reviewed papers from leading academic societies in the field of cybersecurity and cryptography. It is also a project that is launched only after we have ensured that it is secure, even if it is late.
High dispersibility
Cardano is maintained by approximately 3,000+ dispersed stake pools operated by the community. The Camp Fire Stake Pool is one of them.
All blocks and transactions are verified by network participants without reliance on a centralized authority. The decentralized pool is distributed around the world with many ADA holders delegating to the pool (leaving your ADA on hand, but delegating only rights).
Formal Method Development
When developing, IOHK engineers utilize formal methods, which are rigorous mathematical techniques, to test that the software works exactly as envisioned. IOHK is the first in the blockchain industry to apply the same level of rigor to Cardano development that is typically used only for high-risk applications such as software for the aviation industry, space flight systems, and large-scale banking software.
Cardano Development Roadmap
Cardano is being developed in five phases.
- Byron — foundation
- Shelley — decentralization
- Goguen — smart contract
- Basho — scalability
- Voltaire — governance
Be sure to check out Cardano’s roadmap!
Cardano Staking Q&A
What is Cardano (ADA)?
Cardano is a third-generation, decentralized proof-of-stake (PoS) blockchain platform, and ADA is the token of the Cardano blockchain. Cardano is the first blockchain platform to take a scientific philosophical and research-driven approach. Cardano is built through the review of prestigious academic institutions worldwide.
To learn about the world that Cardano aims for, it is recommended to watch a video by the founder, Charles Hoskinson, who has Japanese subtitles, so please take a look.
What is Cardano (ADA) Staking?
Staking is the act of delegating your ADA to a staking pool, which operates a network node. The staking pool can validate Cardano transactions and generate blocks on your behalf, in return for rewards.
Staking in Cardano only delegates your “rights” to the staking pool while keeping your ADA. This means that your ADA is not locked, and you can still use it at any time.
Staking with an exchange, on the other hand, carries the risk of being unable to withdraw your ADA and could lead to centralization of ADA in one place, reducing the decentralization of the Cardano network.
If you are asked to “send an ADA” or “give a seed phrase,” please be aware that this is a scam.
Where can I start staking?
You can delegate from the following Cardano Wallet.
When will I receive my reward after I delegate? Do I always get paid every epoch?
Rewards are paid after three epochs (15-20 days) after the initial staking epoch has ended. The following example shows the events that occur at the time of staking:
Rewards are not guaranteed to be received every epoch, and rewards are given to pools that have generated blocks based on the algorithm calculation based on the pool delegation amount. Pools with more delegations tend to receive stable rewards every epoch, while pools with fewer delegations and lower rewards tend to receive fewer rewards, but the reward amount is greater in one-time rewards. Over a certain period of time, the reward rate converges to the same value.
If delegation of ADA is biased towards places with high delegation amounts, it is not distributed and is not secure, which is not good for the long-term value of ADA. Please delegate to pools with less delegation for the long-term value of ADA.
Staking ADA
Epoch snapshot (record ADA delegated here)
Block generation (if pool has allocation)
Calculation of rewards for block generation
Payment of compensation
What are the pool fees?
There are two types of fees: “Margin fee” and “Fixed fee.” From now on, the pool will receive its reward from the total reward of the pool and distribute the remaining ADA to the delegators.
- Margin fee
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This is a fee set by each pool between 0-100%; 1-5% is common. The Pool sets the rate of return at 0% until 1 million ADA mandates are collected for diversification purposes.
Please be aware that the fee is not too high, such as 99%, and that the fee is not quietly raised in the middle! In this pool, the fee is 0% for less than 1 million ADA and a guaranteed 1% for anything above that.
- Fixed fee
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The fixed fee has a minimum value of 340 ADA. There are no plans to change this minimum value of 340 ADA in this pool. Please always check the fixed fee when delegating to other pools.
Is there a cost for staking?
Staking incurs a deposit fee of 2 ADA and a transaction fee. When you un-stake, the deposit fee of 2 ADA will be refunded.
Is it necessary to re-configure if there is an increase or decrease in ADA after staking?
It is automatically reflected, so no additional operation is required. Cardano staking allows for free sending and receiving even after staking.
Of course, if you leave the rewards earned from staking in your wallet, they will be reinvested.
Is it disadvantageous to delegate to a pool with fewer delegations?
委任量が多くても、少なくてもアルゴリズム上長い目でみると平均約4%程度です(2023年現在)。
委任が多いプールはエポック(5日)ごとに報酬が安定してでますが、委任の少ないプールは毎エポックでない等波がある一方で、1回の報酬が高くなり平均すると同じ利率に収束するアルゴリズムになっています。
ADAの広く分散することでカルダノブロックチェーンのセキュリティも高まるため、長い目でみて委任の少ないプールにもぜひ分散委任のご協力をお願いします。
Whether there are many or few delegations, the average reward rate is about 4% in the long run (as of 2023).
Pools with many delegations have stable rewards every epoch (5 days), while pools with fewer delegations may have waves of non-rewards every epoch, but their reward rate will converge to the same average rate when their one-time reward is high.
For the security of the Cardano blockchain, it is important to have a wide distribution of ADA, so please consider decentralizing your delegation even to pools with fewer delegations in the long run.
Note that the 4% annual reward rate is gradually decreasing, just like the halving in Bitcoin.
Yes, similar to the halving of Bitcoin, the reward rate in Cardano is also gradually decreasing over time. The reward rate of 4% per year is not a constant and is subject to change as the Cardano blockchain evolves.
What is the minimum amount of ADA required for staking?
You can start staking with 10 ADA.
What is pool saturation?
The saturation of one pool is 64 million ADA as of January 2023. If you continue delegating to a pool that exceeds this amount, the rewards you receive from staking in that pool will decrease because the rewards from one pool will not change, even though the number of delegators will increase.
This system ensures decentralization as holders seek profits and naturally delegate to different pools.
Can staking be unstaked?
Yes, staking can be unstaked at any time. If you want to delegate to a different pool, you can simply delegate again without unstaking. If you unstake, the original 2 ADA deposit that you paid will be returned, but a small transaction fee will be charged.
How can I check my remuneration?
There are two ways to do this
- Check the Wallet for Cardano page
- Enter the receiving address on the Cardano Explorer site to confirm.
I’d like to know the steps to staking.
ぜひCAMP FIRE プールに委任をお願いします
How was it? The Camp Fire Stake Pool will continue to provide useful information about Cardano. The stake pool is funded by our fees, so we hope you will delegate your support to help us continue our activities.
If you need any help at all, please contact us directly through either the Camp Fire pool contact or Twitter. We can advise you on everything from ADA purchases to staking, so feel free to contact us first!