What is Cardano? A Closer Look at the “Ethereum Killer”

Cardano is a third-generation blockchain often called the “Ethereum Killer” for its ambitious goal of delivering a faster, more scalable, and energy-efficient alternative to Ethereum. Launched in 2015 by Ethereum co-founder Charles Hoskinson, Cardano uses a Proof-of-Stake (PoS) consensus mechanism to enhance security while reducing energy consumption.

But what makes Cardano stand out? Why do some believe it could challenge Ethereum’s dominance? This guide explores everything you need to know about Cardano, its native cryptocurrency ADA, and whether it truly lives up to the Ethereum Killer label.

What is Cardano?

Cardano is an open-source, decentralized Layer 1 blockchain designed to facilitate secure and scalable peer-to-peer transactions. Like Bitcoin and Ethereum, it operates as a public blockchain, but it offers enhanced smart contract functionality, allowing developers to build and interact with decentralized applications (dApps) and decentralized finance (DeFi) protocols.

Although founded in 2015, Cardano officially launched in 2017 alongside its native cryptocurrency, ADA. Since then, the project has become one of the fastest-growing blockchain ecosystems, gaining traction for its unique architecture. 

Unlike traditional Layer 1 blockchains, Cardano features a two-layer structure that separates transaction processing from smart contract execution. The Cardano Settlement Layer (CSL) is responsible for handling ADA transactions, ensuring speed and efficiency. On the other hand, the Cardano Computation Layer (CCL) manages smart contract execution, enabling a more flexible and scalable ecosystem.

This dual-layer design enhances scalability, efficiency, and security, making Cardano a strong contender in the blockchain space.

A Third Generation Blockchain?

Cardano is referred to as a third-generation blockchain because it was designed to address the scalability, interoperability, and sustainability challenges faced by earlier blockchains like Bitcoin and Ethereum. While Bitcoin (first generation) introduced decentralized digital currency and Ethereum (second generation) expanded blockchain capabilities with smart contracts, both networks struggle with high power consumption, slow transaction speeds, and limited interoperability.

Positioning itself as an improved version of these blockchains, Cardano aims to provide a more scalable, interoperable, and sustainable ecosystem where DeFi applications can thrive. Unlike most blockchain projects, Cardano did not publish a whitepaper before its launch. Instead, it is built on a scientific, peer-reviewed approach, with its foundation resting on Ouroboros, a Proof-of-Stake (PoS) consensus protocol that was the first to undergo formal academic review.

A Brief History of Cardano

Cardano was co-founded by Charles Hoskinson and Jeremy Wood. Hoskinson, one of Ethereum’s original co-founders, left Ethereum in 2014 after a dispute with Vitalik Buterin and the Ethereum team over the project’s future direction. Following his departure from Ethereum, he partnered with Wood to develop Cardano in 2015.

The new project officially launched in 2017 when the first block was mined on the blockchain. Cardano was named after the Italian mathematician Gerolamo Cardano, reflecting its scientific and research-driven approach to blockchain technology.

Cardano’s development is backed by three key organizations:

• The Cardano Foundation: A non-profit organization dedicated to promoting and protecting the project.

• Input Output Hong Kong (IOHK), now known as Input Output Global (IOG): A for-profit technology company responsible for Cardano’s core development.

• Emurgo: A firm that provides blockchain-based solutions, products, and services for developers and businesses building on Cardano.

Unlike many blockchain projects, Cardano was primarily funded by IOG and its partners rather than through public funding.

Cardano’s Roadmap

​Cardano’s development has been meticulously structured into five distinct eras, each named after a notable historical figure, reflecting the project’s evolution and commitment to enhancing blockchain technology.​

1. Byron (Foundation Era): Launched in 2017, this era established the foundational architecture of the Cardano network. It introduced ADA, the network’s native cryptocurrency, and provided users with the ability to transact. Additionally, the Daedalus and Yoroi wallets were developed to facilitate secure and user-friendly transactions. ​
2. Shelley (Decentralization Era): Initiated in 2020, the Shelley era marked Cardano’s transition towards greater decentralization. It enabled the community to operate more network nodes through staking, which enhanced security and promoted a more distributed network infrastructure. ​
3. Goguen (Smart Contracts Era): Unveiled in 2021, the Goguen era introduced smart contract functionality, allowing developers to build dApps and mint non-fungible tokens (NFTs) on the Cardano platform. This expansion significantly broadened Cardano’s utility and appeal within the blockchain ecosystem. ​
4. Basho (Scaling Era): Launched in 2022, the Basho era focused on enhancing the network’s scalability and interoperability. Efforts during this phase aimed to improve transaction throughput and optimize the overall performance of the Cardano blockchain to accommodate a growing user base. ​
5. Voltaire (Governance Era): Commencing in 2024, the Voltaire era represents Cardano’s shift towards a self-sustaining, decentralized governance system. It introduced mechanisms for community members to propose and vote on blockchain improvements, ensuring that the network evolves in alignment with the collective interests of its stakeholders. ​

Each of these eras signifies a strategic advancement in Cardano’s mission to create a secure, scalable, and decentralized platform for the development of innovative blockchain solutions.

How Does Cardano Work?

Cardano operates on its own consensus mechanism, known as Ouroboros, which is based on PoS. Unlike Proof-of-Work (PoW) systems like Bitcoin, PoS allows users to secure the network by staking their ADA tokens instead of relying on energy-intensive mining.

In Cardano’s staking model, users can delegate their ADA to a stake pool, which is a network node responsible for validating transactions and maintaining security. Each stake pool consists of a pool owner and participants who contribute their ADA. As a reward for supporting the network, stakers earn passive income in the form of additional ADA tokens.

Ouroboros stands out as the first blockchain consensus protocol based on peer-reviewed academic research. Cardano claims that this protocol makes its network approximately four million times more energy-efficient than Bitcoin, reinforcing its focus on sustainability and scalability.

Why Cardano Uses a Two-Layer Structure

Unlike most blockchains that combine transactions and smart contracts on the same layer, Cardano separates these functions into two distinct layers. This division improves scalability, security, and efficiency, ensuring that transactions and decentralized applications (dApps) do not compete for network resources.

By separating ADA transactions from smart contract execution, Cardano minimizes network congestion and provides a flexible infrastructure for future upgrades without disrupting the entire system.

Features of Cardano

Cardano incorporates several features that contribute to its growing adoption in the blockchain space.

Gaming and NFTs: Cardano’s smart contract capabilities allow users to mint and trade NFTs, which can be integrated into blockchain-based games for unique in-game assets and collectibles.

Scalability: The network is designed to handle an increasing number of transactions as adoption grows, preventing congestion and ensuring smooth performance.

Interoperability: Cardano supports cross-chain transfers, allowing seamless interaction between different blockchain ecosystems.

Sustainability: Unlike energy-intensive Proof-of-Work (PoW) blockchains, Cardano’s Proof-of-Stake consensus is designed to be more energy-efficient and environmentally friendly.

Staking: Cardano introduced staking in 2021, allowing users to lock their ADA tokens in stake pools, support transaction validation, and earn passive rewards.

Governance: With its decentralized governance model, Cardano enables community participation in decision-making, ensuring that network upgrades and policies align with the interests of its users.

Cardano Vs. Bitcoin

While both Cardano and Bitcoin are decentralized blockchain platforms, they operate with different goals, architectures, and consensus mechanisms.

Bitcoin relies on a Proof-of-Work consensus mechanism, where miners use computing power to validate transactions and secure the network. This system requires large amounts of electricity due to its complex mining calculations.

Cardano, on the other hand, operates on a Proof-of-Stake consensus mechanism, which eliminates the need for mining and significantly reduces energy consumption. Its PoS system, known as Ouroboros, enables ADA holders to stake their coins to validate transactions and secure the network.

Another major difference is their core purpose. Bitcoin was designed primarily as a decentralized payment system for peer-to-peer transactions without intermediaries. Cardano, however, was built to serve as a flexible and scalable blockchain platform, providing developers and researchers with the tools to create decentralized applications and new blockchain-based innovations.

Cardano Vs. Ethereum 

Both Cardano and Ethereum support smart contracts and decentralized applications, but they have notable differences in their history, consensus mechanisms, governance, and market position.

Ethereum was launched in 2015 by Vitalik Buterin and a team of developers, while Cardano was launched in 2017 by Charles Hoskinson and Jeremy Wood.

Ethereum initially operated on Proof-of-Work, but in 2022, it transitioned to Proof-of-Stake through Ethereum 2.0. Cardano, however, has always used its Ouroboros PoS mechanism, making it one of the earliest blockchains to adopt a PoS-first approach.

Governance is another key difference. Cardano’s governance model is structured through Project Catalyst, where ADA holders can vote, propose changes, and participate in decision-making. Ethereum, by contrast, has a more informal governance system, where key decisions are made through core developer consensus rather than a structured on-chain voting process.

​From a market perspective, Ethereum remains the second-largest blockchain by market capitalization. According to CoinMarketCap, Ethereum has a market cap of over $228 billion at the time of writing, with a 24-hour trading volume exceeding $19 billion. Cardano has a market cap of over $25 billion and a 24-hour trading volume of around $1.2 billion.

Another notable difference is supply. Ether (ETH) does not have a maximum supply limit, meaning new ETH can be continually created. In contrast, ADA has a capped supply of 45 billion tokens, introducing scarcity.

What Problems Does Cardano Solve?

Cardano was designed to address key limitations that earlier blockchains like Bitcoin and Ethereum face, including scalability, interoperability, sustainability, high transaction fees, slow speeds, and energy consumption.

Scalability Issues

Bitcoin processes about seven transactions per second (TPS), while Ethereum handles around 30 TPS, leading to network congestion and high fees during peak demand. Cardano solves this with Ouroboros, its PoS consensus mechanism, which enables the network to process significantly more transactions with lower fees while consuming far less energy than PoW systems.

Interoperability Difficulties

Most blockchains function in isolated ecosystems, making it difficult for assets and data to move seamlessly between networks. Cardano is designed to support cross-chain compatibility, allowing it to communicate with other blockchains and interact with traditional financial systems more efficiently.

Sustainability Challenges

PoW-based networks like Bitcoin require massive computing power and energy consumption to validate transactions. Cardano’s PoS model eliminates the need for mining, making it one of the most energy-efficient blockchain networks available.

High Transaction Fees

Ethereum’s gas fees can spike dramatically during periods of high demand, making transactions costly for users. Cardano’s PoS architecture ensures lower, more predictable transaction fees, making it a cost-effective alternative for smart contracts and dApps.

Slow Transaction Speeds

Bitcoin’s block time averages 10 minutes, while Ethereum’s varies between 10–15 seconds per block. Cardano’s layered architecture and PoS system allow for faster transaction finality, improving overall network efficiency.

By addressing these critical issues, Cardano aims to be a more scalable, interoperable, and sustainable blockchain platform for DeFi, NFTs, and enterprise adoption.

Future of Cardano

Cardano has a strong technical foundation and an expanding ecosystem, but its future depends on market adoption, price movements, regulatory developments, and continued developer interest.

A major event shaping Cardano’s outlook is Grayscale’s filing for a spot Cardano ETF, which was acknowledged by the U.S. Securities and Exchange Commission (SEC) on February 24, 2025. The SEC is expected to make a final decision on the ETF by August 2025. It could increase institutional investment in ADA if approved, potentially boosting its price and adoption.

Another key factor in Cardano’s future is its growing developer ecosystem. Several companies and projects are actively building on Cardano, including:

• Blink Labs
• Stricta
• Indigo Protocol
• Blockfrost
• Koios Team
• dcSpark (developer of Flint Wallet)
• DripDropz
• Sundae Labs
• Guild Operators
• Minswap

The continued expansion of DeFi, gaming, and NFT applications on Cardano will also play a major role in its long-term relevance. While the network has the potential for growth and increased adoption, its success will ultimately depend on real-world use cases, regulatory support, and sustained developer activity.

What is ADA? ADA Token, Explained 

ADA is Cardano’s native cryptocurrency, named after Augusta Ada King, Countess of Lovelace, a 19th-century British mathematician often regarded as the first computer programmer. Many people use ADA and Cardano interchangeably, but it’s important to note that Cardano is the blockchain, while ADA is its native coin.

ADA is central to the Cardano ecosystem, facilitating key activities such as paying transaction fees, staking for network security, and participating in governance decisions. Cardano’s success is closely tied to ADA’s value, as the blockchain relies on it for economic incentives and network operations. Since Cardano runs on an open, decentralized protocol, ADA can be sent and received globally, at any time, without third-party interference.

The smallest unit of ADA is called a lovelace, named in honor of Countess Ada Lovelace. One lovelace is equivalent to 0.000001 ADA.

ADA’s total supply is capped at 45 billion, with 35.23 billion ADA currently in circulation at the time of writing. During its initial sale (September 2015 – January 2017), a total of 25.927 billion ADA was distributed. A portion was sold to the public, while 5.2 billion ADA was allocated to the three organizations behind Cardano’s development:

• IOG – 2.46 billion ADA
• Emurgo – 2.07 billion ADA
• Cardano Foundation – 648 million ADA

The remaining supply is reserved for staking rewards, gradually being released until the 45 billion limit is reached.

How to Buy ADA

ADA is available on major cryptocurrency exchanges, making it easy for users to purchase. Here’s a step-by-step guide to buying Cardano on Binance:

1. Create a Binance Account – Sign up on the Binance website or app and complete identity verification (KYC). If you already have an account, log in.
2. Navigate to “Buy Crypto” – Click on “Buy Crypto” to view the available purchase options in your country.
3. Choose a Payment Method – You can buy ADA using fiat currency via credit/debit card, bank transfer, or peer-to-peer (P2P) trading. Alternatively, you can buy a stablecoin like USDT or USDC first and then trade it for ADA.
4. Confirm Your Order – Review the payment details, check for any applicable fees, and finalize your purchase.
5. Secure Your ADA – Store your ADA in a secure wallet or stake it to earn additional rewards.

Where Can I Sell ADA?

You can sell ADA on cryptocurrency exchanges that support Cardano, including:

• Binance
• Coinbase
• Kraken

These exchanges allow you to convert ADA into fiat currency or other cryptocurrencies. Availability may vary based on your location and preferred withdrawal methods.

Staking in Cardano 

Staking in Cardano allows ADA holders to delegate their tokens to a staking pool, helping secure the network and validate transactions. In return, stakers earn rewards in the form of additional ADA, making it a passive way to grow holdings while contributing to the network’s decentralization.

How to Stake Cardano (ADA) on Trust Wallet

Staking ADA is supported on various platforms, including Trust Wallet. Here’s a step-by-step guide to staking Cardano on Trust Wallet:

1. Open Trust Wallet – Log in to your existing wallet or create a new one.
2. Fund Your Wallet – Deposit ADA by transferring it from another wallet or exchange. Use the “Receive” button to generate your wallet address or buy ADA directly on the platform.
3. Select “Earn” – Navigate to the Earn section on the home screen.
4. Choose ADA – From the list of supported staking assets, select ADA.
5. Click “Stake” – Enter the amount you want to stake and select your preferred validator.
6. Confirm Your Stake – Review the details and complete the staking process by following the on-screen instructions.

Once completed, your ADA will be staked, and you’ll begin earning rewards.

Unstaking ADA

Staking involves locking your ADA, meaning you won’t be able to access your staked tokens until you unstake them. If you decide to withdraw your staked assets, simply:

• Go to the “Earn” section on the home screen.

• Select “Unstake” and follow the given instructions.

This allows you to regain access to your ADA whenever needed. 

Can I Make Passive Income With ADA?

Yes, you can earn passive income with Cardano by staking your ADA tokens. When you delegate your ADA to a staking pool, you help secure the network and validate transactions while earning staking rewards in return.

How High Can ADA’s Price Go in 2025?

At the time of writing, ADA is trading at approximately $0.72, 76% lower than its all-time high of $3.09, reached in September 2021.

Cardano’s price has experienced significant fluctuations over the past months. For instance, ADA traded as high as $1.16 in January, proving the market’s unpredictable nature.

Some experts predict increased adoption of Cardano, which could drive its price as high as $6 in 2025. However, given the volatile nature of the crypto market, price movements will ultimately depend on market trends, adoption, and regulatory developments.

What is Cardano Wallet?

A Cardano wallet is a digital wallet used to store and manage ADA tokens. It provides access to your Cardano holdings, allowing you to buy, sell, send, receive, and stake ADA securely.

Think of it as a high-tech vault for ADA—similar to a bank account but without intermediaries. Your wallet stores your private keys, which are essential for accessing your funds. Losing these keys is like forgetting the PIN to your bank account, meaning your funds could be lost forever.

Choosing a reliable wallet is crucial for security and ease of use. Below, we’ll explore different types of Cardano wallets.

Types of Cardano Wallets

Users can choose between software wallets (hot wallets) and hardware wallets (cold wallets) when storing ADA.

• Hot wallets require an internet connection, which offers convenience but slightly less security.

• Cold wallets store funds offline, which makes them the most secure option

Cardano Software Wallets

Full Node Wallets

Full node wallets download the entire Cardano blockchain, offering maximum security and decentralization. Daedalus Wallet, developed by IOG, is the primary full node wallet.

Light Wallets

Light wallets do not require downloading the full blockchain, making them faster and easier to use. Popular options include Yoroi, Eternl (formerly CCvault), Lace, and VESPR wallets.

• Yoroi and Eternl are available as browser extensions and mobile apps.
• Lace is available only as a Chrome and Brave browser extension.
• VESPR wallet is available for iOS and Android users.

Mobile Wallets

Mobile wallets are app-based, allowing users to manage ADA from their smartphones anytime. Examples include:

• Yoroi Mobile
• Atomic Wallet

Web Wallets

Web wallets allow users to manage ADA directly from a browser without installation.

• AdaLite (formerly CardanoLite) and Typhon Wallet are popular web wallets.
• Typhon Wallet supports Chrome, Brave, and Edge and allows staking from multiple accounts.
• Both AdaLite and Typhon are compatible with hardware wallets for added security.

Cardano Hardware Wallets

Hardware wallets offer superior security by storing private keys offline.

• Ledger Nano (S and X models)
• Trezor (One and Model T)

These wallets require physical access to authorize transactions, making them the most secure option for ADA storage.

How to Get a Cardano Wallet

For Software Wallets:

• Download the mobile app or browser extension of your preferred wallet.

• Create an account by following the setup instructions.

• Secure your seed phrase by writing it down offline.

• Buy ADA and transfer it to your wallet.

• Stake your coins to earn rewards.

Congratulations! You now have a Cardano software wallet.

For Hardware Wallets (Ledger Example):

1. Visit the official Ledger website, select a model, and purchase the device.
2. Download and install the Ledger Live app from Google Play or App Store.
3. Set up a Cardano account and follow the on-screen instructions.

Once completed, your hardware wallet is ready to store ADA securely.

How to Secure Your Cardano Wallet

Securing your Cardano wallet is critical to protecting your ADA. Follow these best practices:

• Use a strong, unique password that isn’t shared with other accounts.

• Enable two-factor authentication (2FA) for extra security.

• Store your seed phrase offline (write it down and keep it safe).

• Never share your seed phrase with anyone—if someone has it, they can steal your funds.

• Download wallets only from official sources to avoid malware risks.

• Use a hardware wallet for large ADA holdings, as they offer the highest level of security.

Risks Associated with Investing in Cardano

Like any other cryptocurrency, investing in ADA involves risks and uncertainties due to the volatile nature of the crypto market and the evolving regulatory landscape. Before investing, it’s essential to understand these risks and take precautions.

• Volatility: The cryptocurrency market is highly volatile, with prices fluctuating unpredictably. Cardano is no exception—its value can experience rapid increases and sharp declines, leading to potential financial losses for investors.

• Regulatory Uncertainty: The legal and regulatory environment surrounding cryptocurrencies is constantly evolving. Future government regulations, restrictions, or policy changes could impact Cardano’s adoption, trading, and long-term viability. Investors should stay informed and be prepared for possible regulatory adjustments.

• Potential Security Risks: Although Cardano’s blockchain is secure and decentralized, no system is entirely immune to risks. Smart contract vulnerabilities, exchange hacks, and phishing attacks pose threats to investors. To protect their funds, users should secure their wallets, enable two-factor authentication (2FA), and use hardware wallets for long-term storage.

Frequently Asked Questions (FAQs) About Cardano

Should I own Cardano?

Owning Cardano (ADA) allows you to participate in the network’s ecosystem, which is built for scalability, sustainability, and smart contract functionality. Holding ADA enables staking, where you can earn passive rewards while securing the network. It can also be used for transactions within decentralized applications (dApps) on the Cardano blockchain.

What can I use Cardano for?

Cardano serves multiple purposes within the blockchain space. You can stake ADA to earn rewards, trade it on cryptocurrency exchanges, and use it for smart contracts. The network also enables seamless transactions, allowing users to send and receive ADA globally with minimal fees.

How many ADA tokens are there?

Cardano has a fixed supply of 45 billion ADA. This cap creates scarcity, which could impact its value as demand increases. At the time of writing, the circulating supply is 35,933,788,312 ADA.

What is the all-time high price for Cardano?

ADA reached its all-time high price of $3.09 on September 2, 2021.

What is the smallest unit of ADA?

The smallest unit of ADA is called a lovelace, named after Augusta Ada Lovelace. One ADA is equal to 1,000,000 lovelaces.

Which wallets support ADA?

Typhon, GeroWallet, Nami, Flint, and Tangem support ADA. Typhon and GeroWallet offer staking and token management. Nami is a simple browser wallet for dApps. Flint supports multiple blockchains, while Tangem is a hardware wallet for offline security.

What is the best Cardano wallet?

Ledger and Tangem offer top security. Nami and Yoroi provide easy access. Flint and Typhon are best for dApp interactions. Choose based on your needs.

Why is Cardano called the “Ethereum Killer”?

Cardano aims to be more scalable, energy-efficient, and secure than Ethereum. It has used PoS from the start, while Ethereum switched in 2022.

Is Cardano a safe investment?

ADA is backed by research but remains volatile. Invest wisely, secure your wallet, and never risk more than you can afford to lose.

Final Thoughts

Cardano is a research-driven blockchain designed to tackle scalability, sustainability, and security challenges. Its PoS mechanism, smart contract capabilities, and decentralized governance set it apart from many other networks. With continuous development and growing adoption, it remains a strong contender in the blockchain space.

However, investing in Cardano, like any cryptocurrency, carries risks. The market is volatile, and ADA’s future depends on adoption, technological progress, and regulatory factors. Always do your research, manage risks wisely, and never invest more than you can afford to lose.

In the end, whether Cardano lives up to its “Ethereum Killer” label will depend on its ability to scale, innovate, and attract developers and users. As the blockchain industry evolves, staying informed and making well-thought-out decisions is the key to navigating the space successfully.

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