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Transaction Costs
Transaction Costs on Cardano: Transaction costs on Cardano refer to the fees users pay to execute transactions, deploy smart contracts, or interact with decentralized applications (dApps) on the blockchain. These fees are necessary to compensate network validators (stakers and stake pool operators) for securing and processing transactions. Key aspects of transaction costs on Cardano include:
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Deflationary Currency
A deflationary currency is a type of currency where its total supply decreases over time, either due to a reduction in the issuance rate or the active removal of tokens from circulation (via mechanisms like burning). This decrease in supply can make the currency more scarce, potentially increasing its value over time as demand remains…
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Layer-2 Scaling Solution
A Layer-2 scaling solution on Cardano refers to an additional protocol or network that is built on top of Cardano’s main blockchain (Layer-1) to enhance its transaction throughput, reduce fees, and improve efficiency without altering the underlying blockchain’s security or decentralization. These Layer-2 solutions are designed to handle more transactions and computational tasks off the…
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Zero Knowledge (ZK) Rollups
Zero Knowledge (ZK) Rollups are a type of Layer 2 scaling solution designed to improve the transaction throughput of a blockchain while maintaining security and decentralization. Although ZK Rollups are most commonly associated with Ethereum, they can also be applied to other blockchains, including Cardano. They are particularly effective in reducing congestion and lowering transaction…
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Hard Fork Combinator (HFC)
The Hard Fork Combinator (HFC) is a unique innovation in Cardano that allows the blockchain to undergo upgrades and implement protocol changes seamlessly without disrupting the network’s continuity. It was introduced by IOHK (now IOG), the development team behind Cardano, as a way to combine different protocol versions in a single chain, avoiding the typical…
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Extended UTxO (eUTxO) Model
The Extended UTxO (eUTxO) Model on Cardano is an advanced version of the Unspent Transaction Output (UTxO) model, which was initially used by Bitcoin. The eUTxO model enhances the original UTxO structure by supporting smart contracts and enabling more complex transactions on the blockchain. It was implemented with the Alonzo upgrade in September 2021, when…
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Non-custodial liquid staking
Non-custodial liquid staking in Cardano is a concept that allows you to stake your ADA tokens to earn rewards without having to lock them up for a specific period. Here’s a breakdown of how it works: In essence, non-custodial liquid staking provides flexibility and liquidity by letting you participate in staking while keeping your tokens…
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Types of Addresses (Cardano)
Cardano uses several types of addresses within its blockchain architecture, each serving different purposes. Here are the main types of addresses in Cardano: Each of these addresses has a unique role, and their selection depends on whether you’re participating in staking, regular transactions, or smart contracts.
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Non-custodial Transactions
Non-custodial transactions on Cardano refer to transactions where users maintain full control of their funds throughout the entire process. This means that at no point during the transaction does a third party (like an exchange or intermediary) take custody or control over the user’s assets. Instead, the users themselves initiate and manage transactions directly from…
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Hydra Heads
In Cardano’s Hydra protocol, Hydra heads are off-chain environments or “channels” where a group of participants can conduct transactions independently from the main Cardano blockchain. These heads allow participants to perform fast, cheap, and secure transactions among themselves without needing to constantly interact with the main chain. The Hydra Head protocol aims to enhance the…
