Glossary
The Cardano cryptocurrency that fuels the Cardano blockchain. One ada is made up of 1,000,000 lovelaces.
This is the current exchange rate of ada to US dollars (or another currency) provided by CoinGecko.
Stores wallet addresses as names rather than as long strings of characters. Think of it as a phone contacts list
There is 45bn ada on Cardano, of which 33.59bn is stake in circulation. The ada amount delegated to stake pools is called active stake.
This is everything related to your activity on the blockchain, from your transaction history, to the amount of interest you've earned, where and how much ada you have staked, and so on.
Within the context of the Cardano blockchain, a digital item that has economic value, owned by a person or entity. An asset can be a fungible token used to make transactions like cryptocurrencies or stablecoins, or non-fungible tokens (NFTs), to prove ownership of digital media.
Let’s say a stake pool holds 1% of all the stake in the system, then this stake pool is expected to mint 1% of all the blocks in one epoch (roughly). If you hold 10% of the stake in this stake pool, then you should receive 10% of rewards, or 0.01% of all the rewards in this epoch - cost + margin.
This is the total value of your assets in Lace.
The primary unit of time used by the Ouroboros algorithm. In current Cardano versions, a slot is exactly one second. Slots that are inhabited by blocks are called active slots.
Each block has a unique identifier that can help you look it up on the blockchain. This identifier represents the hash of the block's content, so you can always validate the correctness of the information given against the block's hash.
Block information includes the block ID, epoch, block, slot, confirmations, size, transactions, date, time and creator, along with all the information for the previous and next block.
A burned asset is a native token no longer visible on-chain.
Cardano is a proof-of-stake blockchain network, founded by Charles Hoskinson in 2017. It's the first blockchain founded on peer-reviewed research. It also has unparalleled security and sustainability for decentralized applications, systems, and societies.
A delegation certificate contains your stake key and the stake pool identifier. You sign it with your private stake key. It's one of many certificates on Cardano.
Collectibles is another name for NFTs (non-fungible tokens).
A series of NFTs with the same policyID
When a block is minted, it's not yet permanent on the blockchain. Each new block that's added to a chain confirms the previous block. The older a block is, the more confirmations it gets. So each block you add to the blockchain is a confirmation.
To cover the cost of running a stake pool, the stake pool operator takes a fixed fee in ada. The cost per epoch is calculated from the total ada rewarded to a stake pool, before the operator takes their profit margin.
Credentials create a high level of security and fraud prevention. They usually involve two parties and the process requires both to sign. One is a known party and the other one is the owner of the Lace wallet. Some level of trust is needed from one of the parties to accept a credential.
Also referred to as digital currency, a cryptocurrency (often called crypto) lives on the blockchain ledger. You can use it as a medium of exchange for goods or services, or a store of value. Cryptocurrencies are decentralized, which means they're not controlled by a government or any centralized financial institution.
A DApp is a decentralized application.
The Lace DApp connector saves you time and gives you security when connecting to a DApp. This creates a network effect for the wallet and allows users to only have one wallet for numerous applications. Your credentials are safely shared and paired with the DApp, so there is no need for it to gather more information each time you connect.
Commonly called staking, this is how ada owners can participate in the network. You earn rewards through network participation by delegating the block production rights associated with your ada to a stake pool of your choice. This stake pool can then make more blocks on your behalf.
This is similar to block confirmation. For your delegation to be on the blockchain, it has to complete three steps:
1. The delegation certificate is adopted on chain
2. The delegation choice is enacted (for example, your stake is delegated to a stake pool)
3. You automatically receive rewards from this new stake pool
Each step requires one epoch change.
A certificate that confirms that 'block production rights associated with these specific assets on these public addresses are delegated to a certain stake pool'. The protocol then sends users' delegation rewards to the stake address specified in the delegation certificate.
An ada holder who delegates their stake (digital assets) to a stake pool
A decentralized exchange (DEX) facilitates peer-to-peer (P2P) cryptocurrency conversion.
Refers to stake key de-registration, which takes place when you move your assets to another wallet. You get your two ada deposit back and you still receive any rewards due for at least two epochs.
The Extended Unspent Transaction Output (EUTXO) model is the accounting model used by Cardano. Cardano combines Bitcoin’s unspent transaction output (UTXO) model with the ability to handle smart contracts into an Extended Unspent Transaction Output (EUTXO) accounting model. Cardano leverages EUTXO to facilitate the implementation of smart contracts and a deterministic transaction mechanism, among many other advantages.
The amount of ada or other cryptocurrency charged for transaction processing. Read more about it here.
Money (currency) issued by a government and not supported by a commodity, such as gold. Examples include USD GBP, EUR, YEN, etc.
A hardware wallet is a highly secure way to store your cryptocurrency – usually a USB device. Your keys are stored offline, meaning they are less exposed to the possibility of someone hacking your assets.
A hash is a string of characters produced by a cryptographic algorithm that maps data of a random size. Most commonly, hashes determine the integrity of data.
An incentive is a way to encourage participants to engage in a network by rewarding them with a return that is proportional to their efforts. Incentives aim to ensure equality and fairness by encouraging consistent, active, and strong participation in the network. Cardano uses game theory to calculate the incentives required.
When you don't have enough digital assets to complete a transaction you'll see an 'insufficient funds' notification.
This is a set of two keys, a public verification key and private signing key. These keys are used to process and approve transactions within the blockchain.
Lovelaces are the smallest denominators of the Cardano cryptocurrency, ada. Like in Bitcoin, where one Bitcoin consists of 100,000,000 satoshis, in Cardano, one ada consists of 1,000,0000 lovelaces. Most blockchains only use natural numbers like 1, 3, 5, 10 instead of 1.2, or 42.4. This makes logic operations (smart contract execution) cheaper. By having the smallest denominator expressed in a natural number (lovelaces), the Cardano node performs better and your smart contract execution is cheaper.
An online platform where you buy, sell, display, and trade NFTs.
The operator margin refers to the percentage that the stake pool operator takes for minting blocks on behalf of the delegator. This is on top of the operating stake pool costs. As it is a variable, the margin allows stake pool operators to compete on the best operator price for the delegators.
The creation of a digital asset stored on the blockchain.
A script written on the Cardano blockchain will say that you need x out z signatures to send digital assets from your address. The most common is needing two out of three parties to sign to validate a transaction. These signatures act like witnesses and their public keys derive from the private key corresponding to this address. The address (multi-signature address) is the hash of that script. Read what a hash is here.
The technical infrastructure combining Cardano nodes and their relative interactions into
one unified system.
This means the next time a reward is paid out automatically by the protocol from the stake pool you have delegated to. It always happens in the next epoch.
Lace is a non-custodial wallet, which means you retain full control over your keys, wallet, and assets. Non-custodial is a synonym for self-custody.
A non-fungible token is a unique asset that is not interchangeable with any others. Non-fungible assets represent specific information, such as IP rights. Each token is a whole and indivisible unit.
Onboarding is the process of acquiring all the information you need to use Lace.
Each stake pool has an operator and an owner. The operator runs the infrastructure and the owner puts up the pledge for the stake pool. Together they combine efforts to run the pool.
A pool ID is the unique identifier of a stake pool.
A private key, also known as a secret key, is a variable in cryptography that is used with an algorithm to encrypt and decrypt data. Private keys should only ever be shared with the key's generator or parties authorized to decrypt the data.
Project Catalyst aims to be the world’s largest decentralized and accessible innovation engine for global good. If you have a project proposal, you can submit it during a funding round. If your proposal gets the most votes from the community, it will receive funding with that available sum, at that specific time.
The three parameters of a stake pool are operating cost, margin, and pledge.
A randomly generated string of hexadecimal numbers derived from your root key or mnemomic. This is like an email address for your wallet that you can share with other users so they can send you digital assets.
In cryptography, a public key is a large data string used for encryption. The key can be generated by a software program, but is usually provided by a trusted designated authority. It's then made available to everyone through a publicly accessible repository or directory.
A public address consists of a payment address and a staking address. The registration process confirms a staking key belongs to a particular wallet.
The registration process confirms that the voting keys belong to your wallet.
This is the amount of ada in each new block that will be automatically distributed to the stakeholder by the protocol.
ROA stands for rewards on asset. It's the potential percentage of rewards you might receive after delegating to a stake pool.
Also known as a mnemonic or a seed phrase, a recovery phrase is up to 24 words. The longer the phrase, the less likely it is that someone can guess it. recovery phrases are created when setting up the wallet and they're used to recover it and access your digital assets, so ensure you store it in a safe (preferably offline) place.
The amount of stake delegated to a particular stake pool is measured as a percentage of saturation. Once a stake pool reaches 100% saturation, it has more stake delegated to it than is ideal for the network, and will offer diminishing rewards.The saturation mechanism was designed to prevent centralization by encouraging ada holders to delegate to different stake pools and operators to set up alternative pools, so both can continue earning maximum rewards.
A saved contact in your address book.
Self-custody refers to you being in control of your digital assets, without relying on another party. You – and only you – hold the private keys that allow you to sign transactions and prove ownership of a blockchain address. A non-custodial wallet like Lace allows to maintain your self-custody.
You can choose how to share certain parts of your identity, also known as minimal disclosure. It's similar to when you need to prove your age to enter a venue or buy something by presenting an ID card. However, instead of showing your full ID, you can show just a certificate of age and keep your other details private.
If you'd like to send a digital asset to someone, you'll need to sign the transaction. On a technical level, the signing process merges the message (the transaction details) and your private key. The result is a verifiable signature that is published to the blockchain and verified using your public key.
A slot is like the heartbeat of Cardano. Each one lasts roughly 1 second. In each slot, a block can be minted by the slot leader. Each Epoch consists of 21.600 slots and lasts 5 days.
The size of a stake pool is measured in saturation level. This represents a maximum of 1/k(where k=500) of the total circulating ada supply (~68 million ada).
How ada holders delegate the stake associated with their ada to a stake pool. Although technically called 'delegation' on Cardano, in Lace the term 'staking' is used due to its widespread usage in the blockchain space. See delegation.
A stake pool is a reliable block-producing server node that holds the combined stake of stakeholders in a single entity.
The total wallet balance sums up all the assets you hold, but excludes NFTs, as their value is harder to determine. The fiat balance displayed in Lace is provided by our partners at CoinGecko.
Transactions per second
A transaction is when any amount of assets is sent from A to B. In Cardano, a transaction is 16Kb. This means you could send assets to up to 100 receivers in a single transaction.
In a UTXO model, one transaction can have one or more incoming UTXOs, and two or more outgoing UTXOs. This model may contain metadata (describing the transaction) and a script. All this and more accounts for transaction details. Transaction details are important because they can be independently verified on other applications for correctness.
This represents the unique identifier of a transaction, which is usually the hash of the complete transaction information.
This is when you do not have to rely on only one party to verify the validity or correctness of a claim.
When you send cryptocurrency to another address, you create a transaction. But that transaction needs to be validated and before it can be included in a block. So your transaction will remain as an unconfirmed transaction until it gets a number of network confirmations. Adding a new block to the chain counts as a confirmation, although the number of confirmations needed to validate varies by chain. It's usually ten for Bitcoin and 100 for Cardano, but Cardano makes 100 blocks in the time Bitcoin makes three.
Cardano uses an extended version of the Unspent Transaction Output (UTXO) accounting model. In the simplest of terms, UTXO can be compared to cash change. In this model, a transaction has inputs and outputs, where the inputs are unspent outputs from previous transactions. As soon as an output is used as input in a transaction, it becomes spent and can never be used again. Account-based models, on the other hand, are more similar to credit, where assets are represented as balances within different accounts. These balances are stored as a global state of accounts, kept by each node, and updated with every transaction.
A wallet is an application that keeps your private keys safe and accessible. It has two components: the wallet vault, which protects your private keys, and the wallet application, which allows you to easily use your digital assets. Lace is a non-custodial wallet, which means the two parts of the wallet run on the same computer and the private keys are always under control of the user, so you don't have to ever trust or rely on a third party.
The wallet password is used to decrypt your private key, allowing you to spend your digital assets.
This is the name you give your wallet. It can be anything you like – as long as it's fewer than 20 characters.
To vote on the proposals for Project Catalyst, you'll need to register your wallet on Cardano. This allows the voting system to calculate your voting power based on how much ada you have.
Web3 (or Web 3.0) refers to the next evolution of the Internet, built on the core concepts of decentralization, openness, and greater usability. It has the potential to be as big a paradigm shift as Web 2.0.
You'll see this notification if you try to transfer tokens to a network which is not compatible with your current one.