Back to blog
Crypto Basics

Cardano (ADA) Crypto – What It Is and How It Works?

Learn everything about Cardano (ADA) crypto and how it works in this descriptive guide.
Token Metrics Team
8 minutes
Want Smarter Crypto Picks—Free?
See unbiased Token Metrics Ratings for BTC, ETH, and top alts.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
 No credit card | 1-click unsubscribe

Cardano (ADA) can be described as a blockchain platform that’s designed to enable the development of decentralized applications and smart contracts. It is the first blockchain platform to be built on a scientific philosophy and to be developed through peer-reviewed research and scientific rigor. Developed by a global team of leading researchers and engineers, Cardano is set to revolutionize the way we use and interact with blockchain technology. 

This beginner's guide to Cardano will provide you with all the information you need to understand the platform, its features, and how to use it. From its unique consensus algorithm to its native token ADA, this guide will provide you with a comprehensive overview of Cardano. Whether you're a beginner interested in learning more about Cardano or a blockchain expert looking for the latest information, this guide has you covered from end-to-end. 

History of Cardano

Cardano was founded by Charles Hoskinson, who also co-founded Ethereum. However, Cardano is a very different platform from Ethereum regarding its design and goals. Whereas Ethereum is a decentralized application ("dapp") platform designed to power all sorts of different decentralized applications, Cardano is designed to be a "first generation" blockchain platform that can be used to build decentralized applications, as well as other things.

The Cardano Foundation, IOHK, and Emurgo are developing the Cardano platform. The three groups are working together to build the Cardano platform and will hold a stake in the Cardano ecosystem. 

The first phase of Cardano's development began in 2015. At the time, a company called Input-Output (IOHK) was contracted to build the platform. In 2017, IOHK decided to hand over control of the project to the Cardano Foundation and Emurgo. The three partners are now working together to bring Cardano to market. The next development phase has been completed sometime between 2020 and 2021. After that, Cardano emerged as a fully decentralized blockchain.

How Does Cardano Work?

The Cardano platform uses a proof of stake (PoS) consensus algorithm to manage its decentralized network. Proof of stake is a consensus algorithm where the right to add new blocks to the blockchain is determined not by computing power but by coin ownership. In PoS-based blockchains, users must "stake" or "deposit" their coins to add new blocks to the blockchain for a certain amount of time. The more coins a user stakes, the greater the chance that the user will be selected to add a new block. Cardano uses the Ouroboros proof of stake algorithm. 

Ouroboros is the first proof of stake algorithm to be proven secure in a peer-reviewed paper. This unique algorithm uses a "random selection of a catch-up fellow" to create a network with no central authority. In other words, no single person or group can control the network. The algorithm works by randomly selecting a "follower" who can "catch up" with the "leader."

The leader is the person responsible for adding new blocks to the blockchain. The follower has one job: to predict what the leader will do. If the follower is correct, they are promoted to the leader and given a chance to add a new block. If the follower is incorrect, they remain a follower, and another random person is selected to catch up. The Ouroboros algorithm was expected to be completed by June 2020. But, according to recent reports, Charles Hoskinson said that the Ouroboros Genesis implementation will be in 2023.

Cardano's Development and Governance

The development and governance of Cardano are handled by three large organizations:

The Cardano Foundation: The Cardano Foundation maintains Cardano's core. This group promotes the platform, manages its marketing and communications, and defends the brand.

IOHK: IOHK leads the team behind Cardano's core. This group is responsible for developing and maintaining the platform's core software and bringing new features to the market.

Emurgo: The third group, Emurgo, brings businesses and investments to the Cardano ecosystem. Emurgo helps businesses integrate with the Cardano network and encourages others to build projects on the Cardano platform.

The functioning of Cardano stands tall because of the highly secured and powerful ecosystem as mentioned above. Now, what is Cardano’s native token ADA?

Cardano's Native Token - ADA

Cardano's native token, ADA, sends money on the Cardano blockchain. It also rewards people who help maintain and build the network. The team behind Cardano has stated that ADA is more than just a token: it also serves as "the fuel that drives the Cardano ecosystem." Cardano’s development team has stated that the platform will be fully decentralized once the network has been around for a few years. Until then, the platform will be maintained by a group of stakeholders who have a vested interest in the platform's success. These stakeholders have a stake in the system and are rewarded with ADA for helping maintain the platform. 

There are 3-easy ways to earn ADA

  • Hosting a node, 
  • Providing software assurance, or 
  • Contributing to the development of Cardano's software or research.

Apart from these, Cardano’s powerful 3-layered ecosystem makes it reliable and trustworthy. 

The 3-Layered Cardano's Ecosystem

Here are the three secured-layers that constitute Cardano (ADA): 

The Cardano Network: The Cardano network is the blockchain that runs the ADA token and smart contracts. It is maintained by the stakeholders, who receive ADA for their work.

Cardano's core technology: The Cardano core represents the core software that powers the Cardano network. This includes the programming languages used to build decentralized applications and the virtual machine that runs those apps.

All the projects built on top of the Cardano platform: The Cardano projects layer lists all the decentralized applications built on top of the Cardano network.
To top it all, you can also enjoy the benefit of smart contracts on Cardano. 

Smart Contracts On Cardano

Although Cardano is designed to be a dapp platform, it can also be used to build smart contracts. The programming language used to build smart contracts on Cardano is called Haskell and Cardano's virtual machine, called the "Computing Resources And Dispatcher" (CRDD), can execute many programming languages.

Any decentralized application built in any programming language can be hosted on the Cardano network. Cardano's smart contracts are unique because they are the first to be verified by a formal verification tool called the "Industrial Strength Verification" (ISV). This tool will help you confirm whether or not a smart contract is safe to use.

Cardano's Use Cases

Use Case #1: The first use case for Cardano is a decentralized application platform. This means that developers can build apps on top of the Cardano blockchain. These dapps will be able to send and receive ADA and use other features like the ability to create a wallet or sign a transaction. 

Use Case #2: The second use case for Cardano is as a financial asset. Investors can buy and sell ADA on cryptocurrency exchanges, and the token could also represent ownership in a company.

Now, let’s see the security measures that Cardano aims to offer.

Security on Cardano

One of the most common questions about Cardano is how secure it is compared to other blockchains. Cardano does not claim to be more secure than other blockchains but seeks to be as secure as possible. The team behind Cardano has said that one of their goals is to be the "safest and most reliable blockchain." 

One way Cardano strives to be more secure is through its unique design. While other blockchains are designed to do one thing well, Cardano is designed to do many different things less well. Cardano's design means no single platform part is crucial to its operation. If one part of the platform fails, many other parts can take its place. This indicates safety at its best.

Is Cardano a Worthy Investment?

There we are swinging again to whether or not Cardano is a good investment. Let’s check out the latest updates before we decide, shall we?

According to the Cryptoglobe’s Report, ADA’s price might soar up to 100% by 31st January, 2023. Major upgrades are being anticipated by investors to improve DeFi’s significance through its oracles.

So, Cardano is something to look forward to owing to its upcoming features. 

Future of Cardano

Let’s dive a bit further into the future. Cryptopolitan thinks the price of ADA will soar up to $21.35 on an average, with a minimum price of $20.55. Changelly also believes that ADA price will rise, but the website thinks the coin price will only peak at $15.69, with an average of $13.92, similar to the data from Price Prediction. The website’s analysts predict that the coin’s maximum price will be $15.69 with a minimum of $13.55.

Most experts predict that Cardano might see a bright future in 2023. With persistent developments Cardano’s ecosystem has been witnessing, and in the crypto asset market as a whole, Cardano can potentially reach a new high.

The Bottom Line

Cardano aims to be a "first generation" blockchain technology. The platform is being built by a group of organizations, each with a specific role in the project.

The team hopes this design will help Cardano achieve its goal of being the most secure blockchain. The platform uses a unique consensus algorithm, and its native token is storable in various wallets. The token can be used to represent ownership in a company. 

Build Smarter Crypto Apps &
AI Agents in Minutes, Not Months
Real-time prices, trading signals, and on-chain insights all from one powerful API.
Grab a Free API Key
About Token Metrics
Token Metrics: AI-powered crypto research and ratings platform. We help investors make smarter decisions with unbiased Token Metrics Ratings, on-chain analytics, and editor-curated “Top 10” guides. Our platform distills thousands of data points into clear scores, trends, and alerts you can act on.
30 Employees
analysts, data scientists, and crypto engineers
Daily Briefings
concise market insights and “Top Picks”
Transparent & Compliant
Sponsored ≠ Ratings; research remains independent
Want Smarter Crypto Picks—Free?
See unbiased Token Metrics Ratings for BTC, ETH, and top alts.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
 No credit card | 1-click unsubscribe
Token Metrics Team
Token Metrics Team

Recent Posts

Research

Is the Crypto Market Bullish or Bearish? Why 2025 Is the Year of Neutral Momentum

Token Metrics Team
3 min

The crypto market isn't clearly bullish or bearish in mid-2025 — it's neutral. This article explores why this 'in-between' momentum could signal a maturing market cycle, and what investors should watch for as signals normalize after a sharp $1T rebound in total market cap.

As we navigate through the midpoint of 2025, one question dominates trading desks and Telegram groups alike: Is the crypto market bullish or bearish? Surprisingly, the answer might be neither. Current indicators suggest that we are in a neutral zone — an ambiguous space where the market is no longer surging with euphoric gains but isn’t plunging into panic either.

From January through mid-May, the total crypto market cap has grown from $1 trillion to $2 trillion. This swift rebound signals recovery, but not full-blown optimism. Instead, many analysts — ourselves included — interpret this as a healthy correction and stabilization following intense early-year volatility.

This kind of environment often marks the early stages of a maturing cycle. Unlike the sharp swings we saw in previous bull and bear markets, 2025’s trend suggests more measured growth, driven by fundamentals rather than hype. In other words, the market might finally be learning from its past.

That doesn’t mean the space lacks activity. Sectors like DeFi lending and AI-related tokens continue to gain traction, with significant TVL inflows. Retail interest in meme coins also remains high in select regions. But overall, what we’re seeing is consolidation — not chaos.

In this neutral setting, strategy matters more than sentiment. It's no longer about jumping into trending narratives or panic-selling on dips. Instead, identifying projects with real use cases, sustainable economics, and strong communities has become the foundation of long-term success.

For traders and builders alike, the current landscape offers both challenges and opportunities. Risk-adjusted returns are key, and disciplined portfolio rebalancing could be one of the most underrated strategies right now.

As we continue monitoring market signals, we remain committed to surfacing actionable insights backed by real-time data, not just narratives. Whether the next breakout is weeks or months away, staying informed — and unemotional — may prove to be your best edge.

How Token Metrics Helps in a Neutral Market Environment:

In times of neutral momentum, making profitable crypto decisions becomes more complex — and that's where Token Metrics shines:

  1. Actionable AI Signals:
    Token Metrics scans thousands of tokens daily, using over 80 data points to identify bullish and bearish trends even when market sentiment is flat. This helps users cut through noise and act on real opportunities.
  2. Investor & Trader Grades:
    When hype fades, fundamentals matter. Our proprietary grades evaluate both short-term momentum and long-term viability, helping users discover tokens with staying power — not just temporary pumps.
  3. Smart Rebalancing Alerts:
    In a consolidating market, maintaining the right portfolio mix is crucial. Token Metrics' indices and alerts help users rebalance regularly to lock in gains and minimize downside risks.
  4. Sector-Based Insights:
    With DeFi, AI, and meme coins behaving differently, Token Metrics allows users to dive deep into sector-specific analytics — so you can position ahead of capital flows.
  5. Sentiment & Volume Monitoring:
    Our platform tracks shifts in on-chain activity, social sentiment, and volume trends to spot early signs of market reversals — especially useful when traditional signals stall.

In a market where being early beats being emotional, Token Metrics equips you with the clarity and tools to trade with confidence.

Announcements

🚀 Announcing the Launch of the Token Metrics API & SDK — Powered by $TMAI

Token Metrics Team
5 min

Introducing the Token Metrics API: Power Your Crypto Tools with AI-Driven Intelligence

We’re thrilled to announce one of our most important product launches to date: the Token Metrics API is now live.

This powerful crypto API gives developers, quant traders, and crypto startups direct access to the core AI infrastructure that powers the Token Metrics platform. Whether you’re building trading agents, investor dashboards, research tools, or mobile apps, our API and SDKs provide everything you need to build with real-time crypto data and intelligence—right out of the box.

For the first time, you can plug into the same AI API that drives our ratings, signals, and predictions—and embed it directly into your products, tools, or internal systems.

🔍 What’s Inside the Token Metrics API?

Our crypto API is designed to give you high-performance access to the exact data models we use in-house:

✅ AI Trading Signals

Access bullish and bearish calls across thousands of tokens. These API endpoints are powered by machine learning models trained on historical price action, sentiment data, and blockchain activity.

✅ Investor & Trader Grades

Through our API, you can pull dynamic 0–100 grades on any token. Designed for long-term or short-term views, these scores factor in volatility, momentum, market cap trends, and our proprietary AI predictions.

✅ AI Reports & Conversation Crypto Agent

Query the API to generate custom reports and insights using our smart crypto assistant. Analyze market trends, token health, and investment opportunities—without writing your own models.

✅ Token Performance Data

Retrieve token-level analytics like ROI, predictive volatility, and asset rankings. Perfect for powering dashboards, investor tools, or internal models.

✅ Market Sentiment Models

Use the API to access our AI-modeled sentiment engine, built from social media, news data, and trend signals—ideal for gauging crowd psychology.

All Token Metrics API endpoints are RESTful, fast, and easy to integrate. SDKs for Python, Node.js, and other environments help developers onboard quickly.

🛠️ What You Can Build With the Token Metrics API

Our users are already building next-gen tools and automation using the Token Metrics API:

  • 🤖 CEX Trading Agents — Automate entries and exits with real-time signals and token grades
  • ⛓️ DEX Arbitrage Engines — Scan price differences across DeFi and act instantly
  • 📊 Analytics Dashboards — Build data-driven tools with predictive metrics and visualizations
  • 💬 Alert Bots for Telegram & Discord — Deliver actionable alerts using our signal API
  • 📱 Web & Mobile Crypto Apps — Enhance portfolios and research apps with AI intelligence

With just a few lines of code and an API key, you can turn static crypto apps into dynamic, intelligent systems.

💸 Affordable Pricing & $TMAI Utility

We’ve designed our crypto API pricing to be flexible and accessible:

  • Plans start at $99/month, with high usage limits
  • Save up to 35% when you pay with our native token, $TMAI
  • All tiers include access to powerful AI tools and real-time crypto data

Whether you're a solo dev or scaling a trading startup, there’s a plan built for you. Paying with $TMAI also deepens your utility in the Token Metrics ecosystem—this is just the beginning of native token perks.

🧪 Try the Token Metrics API for Free

Not ready to commit? Try our free API tier with:

  • Limited endpoints to explore
  • Access to live documentation and test queries
  • Sample code and SDKs for instant implementation

Start exploring at tokenmetrics.com/api

🌐 Why We Built This Crypto API

Token Metrics has always been focused on empowering smarter investing. But as the market evolves, we believe the future lies in infrastructure, automation, and open access.

That’s why we built the Token Metrics API—to give developers access to the exact AI systems we use ourselves. Our models have been fine-tuned over years, and now, that same intelligence can power your platform, tools, or trading agents.

Whether you're building research platforms, signal-based apps, or automated execution tools—this API is your edge.

⚡ Start Building with Token Metrics API for FREE→ tokenmetrics.com/api

The crypto market never sleeps—and with the Token Metrics API, neither do your tools.

Research

Inside Token Metrics’ Market Page Upgrade: Smarter Signal Discovery

Token Metrics Team
5 min

Introduction
With thousands of crypto tokens flooding the market, finding the best-performing assets can feel like searching for a needle in a haystack. Token Metrics is solving this with a revamped Market Page experience — designed to surface top signals faster and help users make smarter trading decisions.

Why the Market Page Matters
The Market Page is the heartbeat of Token Metrics' analytics platform. It showcases real-time data on the latest bullish and bearish signals across tokens, providing users with instant access to the platform’s top-rated opportunities. With the recent update, it’s now more powerful and user-friendly than ever.

What’s New in the Market Page?

  1. Top-Performing Signals First – The layout now prioritizes tokens with the highest ROI bold signals. This means the most alpha-generating opportunities are surfaced first — saving users valuable time.
  2. Smarter Filters – Users can sort by return, grade, time frame, and signal type. Want only tokens with a Trader Grade above 80? Just one click away.
  3. Improved Visuals – A cleaner UI now highlights key metrics like entry price, ROI since signal, and latest update date.

How It Helps Traders
This upgrade isn't just cosmetic. It fundamentally changes how traders interact with the platform:

  • Faster decision-making by highlighting the best signals up front
  • Better precision using advanced filters for investor profiles
  • Increased confidence from seeing clear data behind every signal

Case Study: Launch Coin
Launch Coin, the best performing token in 2025 with a 35x return, was identified early thanks to the Market Page’s bold signal tracking. Its signal rose to the top immediately after performance started climbing — helping early users lock in life-changing gains.

How to Use the Market Page Like a Pro

  1. Visit the Market Page daily to track new signal updates
  2. Filter by 24H/7D ROI to catch fast movers
  3. Use Grades to Align with Your Strategy
  4. Follow Narratives: Filter by AI, DeFi, Gaming, and other emerging themes

The Power of Daily Signals
With market conditions changing fast, the daily updates on the Market Page give Token Metrics users an edge — surfacing fresh opportunities before they trend on social media or make headlines.

Conclusion
The new Market Page isn’t just a dashboard — it’s a discovery engine. Designed for both beginner and experienced traders, it brings clarity, speed, and precision to crypto investing.

Choose from Platinum, Gold, and Silver packages
Reach with 25–30% open rates and 0.5–1% CTR
Craft your own custom ad—from banners to tailored copy
Perfect for Crypto Exchanges, SaaS Tools, DeFi, and AI Products