Ardana (DANA) is a protocol developed on the Cardano platform with the aim of enhancing transaction efficiency between stablecoins. To better understand how it works, its outstanding features and the development roadmap of Ardana (DANA) refer to the article below.
What is Ardana?
Ardana is a DeFi hub built on the Cardano blockchain. Ardana provides Cardano’s users with tried and tested DeFi primitives that will catalyze and sustain its financial ecosystem. The first is a decentralized stablecoin platform that enables users to leverage supported Cardano native assets by generating stablecoins against them; the second is Danaswap, which enables high-efficiency swaps between stable asset sets, and provides a venue for liquidity providers to earn trading fees & DANA rewards for their liquidity provisioning.
Ardana is an ecosystem of independently functioning, yet symbiotically operating DeFi protocols on Cardano. From a DeFi macro-perspective, Ardana & its constituent protocols have been designed individually & collectively to function as a financial base layer for the nascent Cardano decentralized economy by using historically proven protocol models based on capital efficiency, stability, and composability.
What is the project trying to achieve?
How does Cardano work?
Cardano’s native blockchain is divided into two separate layers to fulfill different tasks and improve overall efficiency. They are:
- Cardano Settlement Layer (CSL): Used for facilitating peer-to-peer transactions of ADA-native tokens
- Cardano Computational Layer (CCL): Used for executing smart contracts
Proof of Stake (PoS)
The Cardano blockchain operates using a proof-of-stake (PoS) consensus mechanism for discovering new blocks and adding transaction data to the blockchain called “Ouroboros.” This PoS system involves ADA holders locking up, aka “staking,” their coins in pools operated by other participants or becoming operators of stake pools themselves.
While anyone can run their own staking pool, it does require a level of technical expertise to do so successfully. Rewards for adding new blocks to the chain are distributed among the stake-pool operator and stakers after every epoch finishes (5 days), proportionate to how many coins are staked in the pool by each person.
The more coins collectively held in a stake pool, the greater the chance it will get randomly selected to become a slot leader and add the next block in the chain. Think of staked coins like lottery tickets. While having more tickets increases your chances of winning it doesn’t guarantee you will. To prevent giant pools from dominating the system, each staking pool is governed by a “saturation parameter” which essentially offers stake pools lower rewards once they reach a certain capacity to incentivize ADA stakers to relocate their coins to smaller pools.
The Ouroboros consensus system is different from Bitcoin’s proof-of-work (PoW) system, which requires users to compete using specialized computer equipment to discover the next block and has no built-in feature that discourages monopolistic mining operations (other than the fact that bitcoin’s value depends on its being controlled by no one).
In order to create new blocks, Ouroboros uses a time-period system called “epochs” where each epoch lasts five days. Inside each epoch, there are 21,600 smaller units of time called slots, or one slot every 20 seconds. Stake pools are randomly assigned to each slot as a “slot leader” and tasked with creating a new block for that slot.
What is unique selling point?
- Fully Decentralized: Unbiased, collateral backed, and pegged to the US Dollar.
- Borrowing: This allows users to borrow stablecoins against locked collateral.
- Store of Value: Secure store of value preserving value even in volatile markets.
- Powered by Cardano: Built utilizing Cardano’s speed, scalability and security.
Cardano uses the EUTXO (Extended Unspent Transaction Output) accounting model for its transactions which is an extension of the standard UTXO model enabling expressive smart contracts while keeping the semantic simplicity of the UTXO model.