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The current version of Cardano has achieved steps three out of five in the project’s overall development called Byron, Shelley, and Guogen.

The Byron era of the development process in 2017 introduced Ouroboros, the proprietary Proof of Stake consensus protocol on which Cardano is built. It also introduced Cardano’s ADA token, the currency that enables value to be exchanged between users and the project’s dedicated wallet, Daedalus.

The Shelley era in 2020 was focused on decentralization within the Cardano ecosystem, where more nodes were shifted to being run by the Cardano community. This created greater network security and robustness. Shelley also saw the introduction of delegation and incentives as reward systems for stake pools and further adoption. Cardano holders were able to delegate their ADA tokens to be staked in stake pools.

The Guogen era, during 2021, focused on the integration of smart contracts in the Cardano blockchain. This brought the ability for developers to build decentralized applications (dApps) on Cardano’s network. There was also an effort to make Cardano more accessible to financial and business experts to create smart contracts for financial applications without needing technical knowledge thanks to the use of the programming language Marlowe. 

This combination of Marlowe and Plutus laid the stage for a class of enterprise-level smart contracts with large-scale real world use cases. Along with smart contracts, Guogen also saw the addition of a multi-currency ledger to Cardano, which allowed users to create new natively-supported tokens on the Cardano blockchain, including NFTs and the tokenization of other digital and physical assets. 

Guogen’s features are still being finished as of May 2022, but development has started on the last two stages of Cardano’s roadmap, called Basho and Voltaire.

Byron

The launch of Byron involved the foundational elements that allow Cardano to function. Elements implemented at this stage in development include randomness, property-based blockchain testing, and Ouroboros, the consensus algorithm. 

Ouroboros is an innovative Proof of Stake algorithm which utilizes a randomized process to elect stakeholders based on the weight of an individual user’s stake. The core innovation of Ouroboros is flexible architecture that allows for the composition of many protocols to enhance functionality. The modularity of the consensus algorithm enables features such as delegation, subscribable checkpoints, random number generation, and sidechains. 

Blocks of time in Cardano, referred to as epochs, are divided into slots. Slot “leaders” operate in epochs to aggregate and confirm transactions to produce blocks, which can then be approved by endorsers. Cardano argues this design is more scalable than other networks since the Cardano network can increase the number of slots per epoch and run multiple epochs across the network simultaneously.

A slot has a 20 second duration, while an epoch contains 21,600 slots, or five days in total. Stake pools earn transaction fees and a share of the 13.88 billion ADA initially earmarked for staking rewards.

Since not all stakeholders understand how to produce and validate a block, they can instead delegate ADA to staking pools to also benefit from the network. Users managing the staking pools are randomly selected by the Ouroboros algorithm to ensure fairness.

Shelley

Shelley introduced the delegation and incentive scheme that drives the Cardano network and motivates users to exchange value through ADA tokens. The overall goal of Shelley was to create a network that was 50 to 100 times more decentralized than other existing blockchain projects at the time, and to create at least 1,000 different staking pools to ensure decentralization. This implementation aimed to deal with the perceived centralization of crypto mining that affects PoW cryptocurrencies like Bitcoin and Ethereum. 

Goguen

Goguen provides developers the ability to create decentralized applications and smart contracts. The goal is not just to create these capabilities, but to make them more accessible to wider audiences using Marlowe. Marlowe is a new language dedicated to modeling financial instruments as smart contracts on the blockchain. This will give financial professionals the ability to create their own smart contracts without needing to be programmers themselves.

Basho

Basho focuses on the introduction and development of sidechains and interoperability. The purpose of sidechains is to move workload off the main chain and increase the capacity of the network.

With respect to sidechains, Cardano will support a new protocol called KMZ sidechains developed by Kiayias, Miller, and Zindros. These are Cardano-specific sidechains based upon Proofs of Work. KMZ sidechains operate much like other sidechain solutions such as Lightning, Celer, and Matic. The main difference is that Cardano sidechains allow for the movement of funds in and out of the CSL and onto computational layers or other blockchains built to support KMZ/Cardano. Other blockchains and private ledgers have their own regulatory requirements, private operations, and scripting languages, making them black boxes to CSL. However, with KMZ sidechains, the CSL user will gain access (with certain guarantee tradeoffs) about the ledger state and even have the ability to recall funds once computation is complete.

Voltaire

The Voltaire milestone concerns governance mechanisms dedicated to making Cardano a self-sustaining system. Completing this objective requires implementing a treasury and voting system to ensure network participants are able to use their voting stake to direct, develop, and influence the future of the network.