Why Cardano? Ardana’s Blockchain of Choice
Ardana is a stablecoin ecosystem, consisting of a liquidity pool, a DEX (decentralized exchange), and asset-backed stablecoins, built on the Cardano blockchain. The project looks to develop a DeFi ecosystem that can deliver on the promise to give everyone access to DeFi. Cardano’s mainnet saw significant growth recently, with several new projects already launched or in the process of being onboarded on its blockchain.
The team behind Ardana is helping Cardano better prepare its ecosystem and infrastructure to handle free-flowing capital and allow it to easily attract cash flow, continuing towards its goal of a robust and open DeFi ecosystem. After years of development, Cardano has become one of the leading blockchain projects and largest cryptocurrencies in the market. Its focus was centered around real-world applications, but it has since widened this area of focus to include DeFi.
Before we can understand why Ardana has chosen Cardano as its blockchain of choice, let us gain a better understanding of both projects.
An Introduction to Ardana
Ardana is an asset-backed stablecoin protocol and DEX built on the Cardano blockchain. It offers access to on-chain Cardano-native assets coupled with seamless transactions and swaps between them. The Ardana ecosystem consists of two main products: its stablecoins (comparable to MakerDAO) and Danaswap, a DEX that operates similarly to Curve Finance.
Danaswap enables seamless, high-speed swaps between stablecoins and other assets through multi-asset liquidity pools, in addition to reward-based mechanisms to enable DeFi at its fullest.
What is Cardano?
Cardano is an open-source, decentralized blockchain project that facilitates peer-to-peer transactions. It uses a layered architecture, facilitates smart contracts, and offers better scalability than competitors, like Ethereum. The platform’s native cryptocurrency, ADA, can be leveraged by users on Cardano to conduct transactions and validate on its Proof of Stake (PoS) network.
The Cardano blockchain is made up of third-generation technology that significantly improves the underlying problems (i.e. scalability, energy consumption) faced by first and second-generation blockchains, such as Bitcoin and Ethereum.
Cardano has all its protocols peer-reviewed, allowing it to easily and quickly tackle any potential issues. On top of this, the project is backed by several organizations, working in tandem with them to develop the platform. The main organizations working on the Cardano blockchain are Input Output Hong Kong (IOHK), Emurgo, and the Cardano Foundation.
Why Did Ardana Choose to Build on Cardano?
Since its founding, Cardano has grown in leaps and bounds, becoming one of the leading blockchain projects globally.This rapid growth is easy to see in comparison to its competition, as ADA is currently the 6th largest cryptocurrency by market capitalization. The success of Carcano is easily traced back to it’s Founder, Ethereum Co-Founder Charles Hoskinson, who identified the need for a scalable blockchain and smart contract solution. Hoskinson teamed up with Jeremy Wood, who shared similar views of the market’s needs.
From that point forward, Cardano was born.
Development began in 2015, with the project focused on building solutions to improve the blockchain. The first public iteration of the project was released in 2017, starting with the Byron phase, followed by Shelly, which introduced staking and better decentralization. The Goguen era saw Cardano add a smart contract ability, enhancing its blockchains’ overall use cases and functionality for dApps (decentralized applications) and protocols.
The Technology Behind Cardano
Cardano’s protocols are peer-reviewed before they’re added for use on the platform. The project utilizes two programming languages named Haskell and Plutus. As previously mentioned, rather than using a Proof of Work (PoW) consensus mechanism, which consumes a significant amount of electricity to verify transactions, Cardano uses a PoS consensus mechanism. This allows it to utilize significantly less power and fuel a much more sustainable ecosystem.
Cardano’s PoS consensus mechanism is significantly different from that of Bitcoin’s PoW consensus mechanism. BTC requires specialized rigs to solve for the next block, but also lacks any features that could prevent potential monopolies over mining operations.
Ouroboros is Cardano’s PoS mechanism that uses a system of time periods, also known as “epochs.” Each epoch lasts for five days, with each one containing 21,600 smaller units called “slots.” One slot is equal to 20 seconds. Stake pools are assigned randomly to each slot, and slot leaders are selected through a lottery system. To ensure fairness, Cardano selects slot leaders using the following method:
- The user must have a 2% stake in Cardano
- The higher the stake, the better the chances of being selected as a slot leader
- If slot leaders fail to create a block during their slot, they are replaced and must wait until re-election
Ouroboros allows ADA holders to stake their coins in pools that other users operate. Alternatively, token holders can also become stake pool operators themselves. Any rewards generated for adding new blocks to the blockchain are shared between the pool operators and stakers at the end of every epoch.
Cardano: The Best Fit for Ardana
With Cardano well on the way to creating an ecosystem to address the issues of older blockchains, it’s now focused on developing cheaper, quicker, and more scalable solutions for blockchain-based transactions. According to Ardana’s team, this makes Cardano’s ecosystem perfect for the Ardana protocol.
Cardano is set to become a top ecosystem in the DeFi space, blurring the lines between DeFi and TradFi (traditional finance). The team at Ardana set out to create a DeFi hub on Cardano to enable the protocol to experience the same level of growth seen on Ethereum, Binance Smart Chain, and Polygon (Matic). To enhance stability, the team at Ardana also introduced a stablecoin and a stable-asset exchange.
Ardana’s team reached out to Cardano to build the infrastructure required for their project. Cardano also required a significant liquidity floor, along with a suitable stablecoin suite; this was achieved by offering lending through Ardana vaults, which enabled minting for its various stablecoins. Ardana’s team also had the vision to bring foreign exchange to the decentralized world, opening this up to more users. They needed to ensure that the price to swap between different currencies was close enough to the actual price for foreign exchange, though. This led to the creation of Danaswap, a stablecoin DEX built on the protocol.
Ardana’s DeFi ecosystem has the ability to fully unleash Cardano’s potential, allowing it to become one of the most prominent players in the DeFi space. The benefits are mutual, as Ardana’s association with Cardano means it is backed by one of the largest and most trusted blockchain protocols. Ardana’s ecosystem on Cardano will truly take Cardano’s functionality to a whole new level.
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