successfully, whereas Ethereum is still struggling to do so till now.

Cardano’s Proof of Stake protocol is called “Ouroboros” that relies

on the stake pools for processing the transactions and blocks and

saving them to the ledger. Cardano consists of many such stake

pools or reliable server nodes that are responsible for the

maintenance of the combined stake of many different stakeholders in

a single entity. Cardano has been able to generate huge amount of

trust in the market by maintaining over 2,000 distributed stake pools

handled by the community. Hence, it’s a huge success for Cardano

where all its transactions in Blockchains are validated by the users

without any dependency on a centralized authority. Of course, the

maintenance of Ouroboros would involve some cost, but that is

covered by the transaction fees deposited by the users. Though

initially introduced only as a public Blockchain, Cardano got the

smart contract support in 2021.

5.2 Transaction fees

Cardano’s transaction fees are dependent on two constants, which

are protocol parameters and the size of the transaction in bytes. The

values of the protocol parameters can be adjusted in order to adapt

to the changes in the transaction volume, hardware prices, and the

underlying crypto’s valuation. Cardano’s inherent crypto is called

ADA. The current transaction fees on Cardano is close to 0.16 ADA

per transaction, which is $0.4 USD.

5.3 L2 Solutions

Have you heard of Hydra, the serpentine water monster in Greek

and Roman mythology that has many heads? If any of the monster’s

head was chopped, a new head would regenerate.

The second layer solution on top of the Cardano is called “Hydra”,

which is an extended UTxO model that allows sharding of the stake

space without the need to shard ledger itself. Every pool can create

a new Hydra’s head and each head can process around 1000 TPS.

Hydra also comes with low latency and minimal storage features as

well as the support for smart contracts, using which, DApps can be