-
Liquidity pools
Liquidity pools are collections of cryptocurrency tokens that are locked in smart contracts and used to facilitate trading on decentralized exchanges (DEXs) like those powered by automated market makers (AMMs). These pools provide the liquidity necessary for users to trade cryptocurrencies without relying on traditional order books and intermediaries, as seen on centralized exchanges. Key…
-
Automated Market Maker (AMM)
An Automated Market Maker (AMM) is a type of decentralized exchange (DEX) mechanism that allows users to trade cryptocurrencies without the need for a traditional order book and intermediaries. Instead of matching buyers and sellers like on traditional exchanges, an AMM uses a mathematical formula and liquidity pools to facilitate trades directly between users and…
-
Decentralized Finance (DeFi)
Decentralized Finance (DeFi) refers to a financial system built on blockchain technology that operates without intermediaries such as banks, brokerages, or exchanges. Instead, DeFi relies on smart contracts, which are self-executing agreements with terms written into code, allowing users to engage in various financial activities directly with one another. Key Features of DeFi: Example of…
-
Mempool
A mempool (short for memory pool) is a temporary storage area where pending transactions are held before they are included in a block and confirmed on the blockchain. When a user initiates a transaction, it is broadcast to the network and first goes into the mempool of participating nodes. Here’s how a mempool works: In…
-
Daedalus (Cardano)
Daedalus is a full-node desktop wallet for the Cardano blockchain, developed by IOHK (Input Output Hong Kong), one of the key organizations behind Cardano. It offers a secure, feature-rich way for users to interact with the Cardano blockchain and manage their ADA (Cardano’s native cryptocurrency). Key features of Daedalus include: As a full-node wallet, Daedalus…
-
The Cardano Node
The Cardano Node (not to be confused with “Cardano nodes“–the Cardano blockchain is powered by a flock of inter-connected nodes) is a core software component in the Cardano blockchain ecosystem, specifically the official implementation that powers the Cardano network. It is written in the Haskell programming language and is responsible for running the Cardano blockchain.…
-
On-Chain (Validator scripts)
On-chain validator scripts in Cardano are part of the smart contract functionality within the network. These scripts are small programs that run directly on the Cardano blockchain, responsible for validating specific conditions or rules when a transaction is processed. Here’s how they work: In essence, on-chain validator scripts are the core mechanism in Cardano’s smart…
-
Hard Fork
A hard fork on Cardano refers to a significant upgrade to the blockchain protocol that introduces new features or changes how the network operates, requiring all participants (nodes) to update to the new version. Unlike traditional hard forks that can split a blockchain into two separate chains, Cardano’s hard forks use a unique Hard Fork…
-
Concurrency (Cardano)
Concurrency in Cardano refers to the ability of multiple transactions to be processed and executed at the same time, without waiting for one another, especially in the context of decentralized applications (dApps) and smart contracts. This is an important concept because, unlike traditional systems where operations happen sequentially (one after another), blockchain systems like Cardano…
-
Transaction Inputs & Outputs (Cardano)
In Cardano, transaction inputs and outputs are key components of the UTxO (Unspent Transaction Output) model, which is used to manage how value (such as ADA) is transferred across the blockchain. Let’s break down what they mean and how they work. Transaction Inputs Transaction Outputs Inputs and Outputs in Action Example Transaction Imagine your wallet…
