Popular Cardano Terms (Glossary)

Cardano glossary of terms ADA

Here are some of the most popular terms related to Cardano (the Cardano lingo) and the ADA cryptocurrency:

  • 51% attack: If more than half the computer power on a network is run by a single person or a single group of people, then a 51% attack is in operation. This means this entity has full control of the network and can negatively affect a cryptocurrency by halting mining, disabling staking, stopping or changing transactions, and reusing coins.
  • Active Stake: The stake that is currently used by stake pools. The state has been snapshotted in the previous epoch.
  • ADA: Ada is a digital currency. Any user, located anywhere in the world, can use ada as a secure exchange of value – without requiring a third party to mediate the exchange. Every transaction is permanently, securely, and transparently recorded on the Cardano blockchain. Every ada holder also holds a stake in the Cardano network. Read more on how to buy ada.
  • Adalite: A simple Cardano web wallet developed by Cardano partners Vacuumlabs. You can also AdaLite it to stake ADA from your Ledger or Trezor hardware wallet.
  • Address: The unique identifier (similar to an email address) to which users may send ada cryptocurrency and tokens. It is typically derived from a public key, which is derived from a user’s private key. An address is often represented by a string of numbers and letters.
  • Adrestia: a collection of products to ease integration with Cardano. It is made of several Application Programming Interfaces (APIs), Command-line Interfaces (CLIs) and Software Development Kits (SDKs).
  • Alonzo Hard Fork: A hard fork of Cardano, the last stage 3 of the roll out of the Goguen era – the Cardano smart contracts update.
  • Asset: Assets for Cardano native tokens can essentially be anything than can be quantified.
  • Asset token: tokens that are backed by real world assets like gold or real estate. Digitizing can make purchase processes quicker and easier. Being able to fraction or split tokens will also open up markets to those investors that may not have been able to participate in investing until now.
  • Atala Prism: The digital identity app that runs on Cardano. More on Atala at AtalaPrism.io
  • Basho: (also known as Basho era) is a major Cardano update that will focus is on scalability and interoperability.
  • Block: A record of blockchain transactions, very similar to a page in a ledger. A block contains a number of transactions performed during the life of the block and is stored in the chain for ever.
  • Blockchain: A distributed ledger that keeps track of value or data owned by maintaining a database of verified transactions. A blockchain is made up of validated blocks, each linking to its predecessor all the way back to the genesis block.
  • Burn (or burn event) is the process of destroying coins or tokens, usually as a way to reduce cryptocurrency supply.
  • Byron: (also known as Byron era) was the first release of the Cardano blockchain. Its primary purpose was to create liquidity for the ada token.
  • Cardano: is a third generation blockchain network with the cryptocurrency ada running on it.
  • Chain: a set of blocks that have been produced and are connected to another in consecutive order.
  • Circulating Supply: The total number of coins in a cryptocurrency that are publicly tradable is considered the circulating supply. Some coins can be locked, reserved or burned, therefore unavailable to public trading.
  • Confirmed: When a transaction has been confirmed, it means it has been approved by the network and permanently appended to the blockchain.
  • Consensus: the process by which a majority opinion is reached by everyone who is involved in running the Cardano blockchain. Agreement must be made on which blocks to produce, which chain to adopt, and to determine the single state of the network.
  • Controlled stake: What is the total amount of ADA that the stake pool controls in order to qualify to mint blocks (to be a slot leader). This includes the pledge amount plus the delegated amount to the stake pool. It can be measured as a total ada amount (e.g. 5M ada), or as a percentage of the total supply of ada within the network (e.g. 3%).
  • Cost per epoch: A fixed fee that a stake pool operator takes per Epoch (per 5 days) to cover the costs of running a stake pool. A requirement for a stake pool to be active is to charge a fee of 340 ada.
  • Cryptocurrency: a digital asset that is stored on a distributed ledger. Often shortened to just crypto or used interchangeably with token.
  • Daedalus: is a digital wallet for the Cardano blockchain that can hold, transfer, and delegate ada. Go to the official Daedalus website. Read more about Cardano wallets for ada here.
  • DApp: decentralized application that run on a blockchain.
  • Decentralization: is achieved when a system is maintained and updated by a number of different agents all working together independently, and cannot be controlled by a single group.
  • Delegation: The process of assigning your state to a staking pool. Here is more information on how to delegate.
  • Devnet: development environment (pre-production environment) on Cardano. See also Mainnet, Testnet.
  • DID: Digital Identifier that runs on Cardano accessible via Atala Prism.
  • Epoch: In the Cardano mainnet, an Epoch is 5 days. Ouroboros divides time into Epochs, and each epoch is divided into slots. A slot leader gets elected for each for the right to add a block to the Cardano blockchain. 
  • Fiat: (also known as fiat currency) refers to money recognized as legal tender by governments, such as the US dollar, British pound and Euro.
  • FOMO: An acronym for “fear of missing out”.
  • Fork: When multiple pools create blocks from the same parent block, creating alternate blockchain candidates.
  • FUD: Acronym for “fear, uncertainty and doubt”.
  • Full Node: Some nodes download a blockchain’s entire history in order to enforce its rules completely. As they fully enforce all the rules, they are considered to be a full node.
  • Fund2: is a public fund built to attract developers and entrepreneurs to the Cardano ecosystem, part of Project Catalyst.
  • Fungible tokens: represent assets of equal value. For example, Cardano’s native token, ADA, is a fungible token, as each ada is worth the same amount as the next. Similarly, stablecoins, such as those pegged to a national currency, would be considered fungible tokens. Fungible tokens are often used similarly to fiat currency, or pegged to the price of a particular asset, such as an ounce of gold.
  • Genesis block: The first or first few blocks of a blockchain.
  • Goguen: (also known as Goguen era) is a major Cardano network update that will introduce smart contacts on the Cardano blockchain.
  • Governance: The process of creating proposals, discussions and voting in order to influence the future of the cryptocurrency in a democratic way is referred to as governance. In the Cardano blockchain, the governance will be introduces with the Voltaire era (Voltaire update) and ADA stake holders will be able to vote on proposals.
  • Hard fork: a radical change of the network’s protocol changing the state of operational flow from one model to a completely different one. Cardano has undergone a hard fork to transition from a federated model to a decentralized one with the Shelley update in 2020.
  • Hardware Wallet: A physical device (similar to a USB stick) that stores cryptocurrency in its encrypted form. It is considered a secure way to hold cryptocurrency. Such a wallet that can hold ada is Trezor.
  • Haskell: A functional programming language used in the development of Cardano node.
  • HODL: A synonym for HOLD.
  • Incentivized Tentnet: Is a test network where users can experiment with new features and code and provide their feedback before a live mainnet launch. A testnet can be run locally or in some cases a public is used. Incentives aim to ensure equality and fairness in a distributed network of participants by encouraging consistent, active, and strong participation. Cardano’s incentives model uses game theory to calculate the incentives required.
  • ITN: The Shelley Incentivized Testnet.
  • Key pair: a set of two keys: public (verification) key and private (signing) key. The keys are used to process and approve transactions within the Cardano blockchain.
  • Ledger: a distributed database operated in a decentralized manner by multiple nodes across many locations. May also refer to the Ledger Nano, a popular hardware wallet.
  • Live Stake: The current state of delegated coins to pool.
  • Lovelace: the smallest unit of ada, equivalent to one millionth of one ada. A lovelace is to ada what a satoshi is to bitcoin.
  • Mainnet: a live blockchain that has been deployed and is in operation. See also: testnet, devnet.
  • Marlowe: a domain-specific programming language that is built on top of Plutus functionality. Marlowe can be used for financial purposes. There is also a friendly Marlowe playground (where non-technical users can easily execute smart contracts prewriting specific conditions).
  • Mary Hard Fork: A hard fork performed on Cardano in Q1 2021, stage 2 of a total of 3 stages roll out of the Goguen era, that introduced native tokens.
  • Moon: A term used to describe a major price movement upwards.
  • Native: Logic is based on the Cardano ledger, rather than smart contracts.
  • Native Tokens: a new feature that enables the transacting of multi-assets on Cardano. Users can transact with ada, and an unlimited number of user-defined (custom) tokens natively. See all the created native tokens at CardanoAssets.com
  • No Central Authority: Could mean two things: 1. A mechanism of a system that governs itself without depending on a trusted third party for authorization; 2. The home of the No Central Authority (NCA) stake pool.
  • Node: A copy of the ledger operated by a participant of the blockchain network. A full node maintains a complete copy of the blockchain, while a light node relies on full nodes to operate. Typically, the more full nodes, the more secure the network.
  • Non-fungible tokens: Not every asset is of equal value, even if it is of the same type. NFTs, ensure that each token is unique, with its own characteristics. Take a piece of artwork for example. Superficially, a painting is the same type of object or asset as any other painting. However, we know that a Van Gogh is intrinsically more valuable than an amateur piece of art, and these important unique characteristics can be coded into an NFT to reflect these differences.
  • Paper Wallet: Storing your wallet code (your private key) on a physical document (like a piece of paper) makes it a paper wallet. It’s also sometimes referred to as cold storage.
  • Peer discovery: a process by which nodes find each other on the network and initiate contact.
  • Pool margin: A fee that a stake pool charges as a percentage of the total payout from the blockchain for minting a block, when the pool is successfully selected as a slot leader.
  • Pool performance: a percentage measure of the efficiency of a stake pool. It is measured by how many blocks a stake pool has produced (and that are recorded on the main chain) compared to how many it was nominated to produce. For example, if a pool only produces half the number of blocks that were nominated, its performance rating is 50%. This happens when a pool has a poor network connection, low latency, or has been turned off by its pool operator.
  • Pool saturation: this is a threshold of amount of ada, that can negatively affect stake pool performance, because it has more stake delegated to it than is ideal for the network. Saturation is displayed as a percentage. When a stake pool has too big of a controlled stake, it may go over the saturation point that could negatively affect the pool’s ability to mint blocks (to be a slot leader) and to earn rewards. Read more about Cardano pool saturation here.
  • Pledge: (also known as pool pledge) When registering a new stake pool, pool operators may choose to pledge some, or all, of their ada to the pool. This is also an influencing factor that determines the rewards generated by the stake pool. Read more about pool pledge here.
  • Plutus: a Turing-complete programming platform for writing functional smart contracts on the Cardano blockchain. It is based on the Haskell programming language.
  • Private Key: A string of numbers and letters that are used to access your wallet. While your wallet is represented by a public key, the private key is the password you should protect and never share. You need your private key when selling or withdrawing cryptocurrencies, as it acts as your digital signature.
  • Produced blocks: the number of blocks that have been produced by a stake pool in the current epoch. Stake pools are rewarded for each block they produce.
  • Project Catalyst: part of the Cardano network’s transformation into a self-sustaining system. A set of governance tools and processes that puts the future of the network in every ADA holder. Official website of Project Catalyst.
  • Proof-of-Stake: Proof of Stake (PoS) concept states that a person can mine or validate block transactions according to how many coins he or she holds. This person can receive rewards for participating.
  • Public Key: an unique wallet address, which appears as a long string of numbers and letters. It is used to receive cryptocurrencies.
  • Pump and dump scheme: refers to a group of people artificially inflating the price of an asset through false and misleading information. In essence, they will buy an asset for a low price all at once, prompting the price to rise.
  • Rewards: Incentives paid to delegators for participating in staking. Incentives are used to ensure the longevity and health of the Cardano network and ecosystem.
  • ROA: Return of ADA. This is the rewards percentage of a stake pool and is a measure of performance of the stake pool. The higher the better.
  • Saturation: See: Pool Saturation.
  • Security token: like securities from the old financial system, these represent shares of a company, but with benefits of blockchain.
  • Shelley: (also known as Shelley era) is a major Cardano update and is a period of growth and development for the network. This update ensures the decentralization of the network. The upgrade utilizes the Ouroboros consensus algorithm – a proof-of-stake (PoS) protocol leveraging cryptography, combinatorics and mathematical game theory.
  • Slot: a fixed period of time within an epoch. Each epoch of time is divided into numbered slots. Slots that are inhabited by blocks are called active slots. Each slot is assigned to a different slot leader.
  • Slot leader: The participant in the network that is selected to create “mint” a block within the current slot in the blockchain. A random election process occurs based on the proportional stake.
  • Smart contract: Algorithm that controls the transfer of digital assets under specific conditions on the blockchain. Smart contracts have addresses and look similar to a user’s wallet address. A simple smart contract may be written to issue newly created tokens to a user when they send a blockchain’s native tokens to the smart contract. A user can look at the smart contract on the blockchain before sending tokens to ensure that it will function as intended before sending.
  • SPOCRA: Stake Pool Operator Collective Representation Assembly is an organization that has been born out of necessity and committed to being a voice for all of the stake pool operators that want to contribute and benefit from participating in the Cardano ecosystem. Read more on the official SPOCRA website here.
  • Stablecoin: Designed to hold a steady value peg, stablecoins are often used to represent or track the value of an underlying currency. Stablecoins have become particularly useful for quickly exiting and entering the digital asset markets, without going through the onerous process of converting to fiat. Stablecoins can also be used in blockchain-based funds, to represent the net asset value of the fund. stablecoins, such as those pegged to a national currency, would be considered fungible tokens.
  • Stake holder: An owner of ADA cryptocurrency and/or a person with vested interest in the system.
  • Stake pool: Stake pools hold stake and processes transactions in the network. They also secure the network and pay rewards to delegators based on their staked amount. Learn more about choosing a stake pool here.
  • Staking: is also called delegation. This is the process of delegating ada to a stake pool to generate rewards. Here is more information on how to delegate.
  • Testnet: testing environment on Cardano, designed to test code before launching on the Mainnet. See also: devnet.
  • Token: It is used to represent exchange of value on a blockchain network. It may refer to ada or may be used for units of value created on a blockchain with no economic connection to the blockchain itself. It is often used interchangeably with crypto or cryptocurrency. See also the different types of tokens as: security token, asset token, stablecoin, non-fungible tokens.
  • Token bundle: A representation of multiple tokens.
  • Tokenization: the process of representing real-world assets with digital tokens. The ability to issue native tokens on the Cardano blockchain.
  • Transaction: a record that represents the process of sending or receiving funds in the system.
  • Transaction Fee: A small fee given to the miners/slot leaders involved in successfully approving a transaction on the blockchain. This fee can vary depending on the difficulty involved in a transaction and overall network capabilities at that moment in time. If an exchange is involved in facilitating that transaction, it could also take a cut of the overall transaction fee.
  • Ouroboros: The protocol used by Cardano for Proof-of-Stake.
  • Utility tokens: they offer a simple and decentralized way to access applications built on the blockchain. Utility tokens are usually written and deployed using a token standard for a specific blockchain, and serve the applications built atop that specific chain. They are usually not interoperable with multiple protocols.
  • Unconfirmed transaction: (also known as Zero Confirmation Transaction) transactions are unconfirmed until the network has examined the blockchain to ensure that there are no other transactions pending involving that same coin. In the unconfirmed state, the transaction has not been appended to the blockchain.
  • Voltaire: (also known as Voltaire era) is a major Cardano update that will introduce governance to the Cardano network. It will provide proposal and voting capabilities to ada stake holders and a decentralized Governance model.
  • Wallet: is an address in the blockchain that can store cryptocurrency. Wallet or digital wallet is also referred to a piece of software that can facilitate the transfer and delegation of cryptocurrency. Some of the Cardano wallets include Daedalus and Yoroi wallets. Read more about Cardano wallets for ada here.
  • Whale: A term used to describe extremely wealthy investors or traders who have enough funds to manipulate the market and move the market price.
  • White Paper: A detailed explanation of a cryptocurrency, designed to offer technical information, explain the purpose of the cryptocurrency and set out a roadmap for how it plans to succeed. Read the Cardano roadmap here.
  • Yoroi: is a digital walled on the Cardano blockchain to store and transfer ada cryptocurrency. Go to the official Yoroi site. Read more about Cardano wallets for ada here.

 

Draven Flash

Draven Flash is an IT professional with 20 years of network, server administration and security experience. Avid Cardano/ADA enthusiast since 2017.