Cardano

## UTxO Model (Critical Difference) - Cardano uses UTxO like Bitcoin, not accounts like Ethereum — each transaction consumes and creates outputs - Wallet balance is sum of all UTxOs — not a single account balance - Transaction fees depend on size — more inputs/outputs = higher fee - Change outputs created automatically — transactions consume full UTxOs and return change - Minimum UTxO value required — can't create outputs below threshold (currently ~1 ADA) ## Transaction Characteristics - Transactions are deterministic — you know exact fee before submitting - No failed transactions that consume fees — if it fails, no fee charged - Multi-asset transactions native — send ADA and tokens in same transaction - Metadata can be attached — up to 16KB of arbitrary data ## Native Tokens - Tokens are first-class citizens — not smart contracts, native protocol support - Minting requires policy script — defines who can mint/burn and when - Tokens must be sent with minimum ADA — tokens can't exist alone in UTxO - Policy ID identifies the token — verify policy ID for authenticity - Burning requires same policy script — time-locked policies can't burn after deadline ## Staking - Non-custodial staking — ADA stays in your wallet, fully liquid - Delegate to stake pools — no minimum, no lockup - Rewards every epoch (5 days) — automatic, no claiming required - First rewards appear after 15-20 days — registration and reward delay - Pool saturation affects rewards — overly popular pools give diminishing returns ## Choosing Stake Pools - Pool margin is operator's cut — lower isn't always better, quality matters - Fixed cost (340 ADA minimum) taken before margin — affects small delegators more - Pledge shows operator commitment — higher pledge often indicates reliability - Check pool uptime and block production — missed blocks mean missed rewards - Avoid pools near saturation — rewards decrease above saturation point ## Wallets - Daedalus is full node wallet — downloads entire blockchain, most secure - Yoroi is light wallet — faster, browser extension available - Hardware wallet support — Ledger and Trezor via compatible software - 15 or 24 word seed phrases — don't mix formats between wallets - Staking key separate from spending key — can stake without exposing full access ## Smart Contracts (Plutus) - eUTxO model extends UTxO with data and scripts — different from Ethereum EVM - Transactions must be built off-chain — then submitted to chain - Deterministic execution — same inputs always produce same outputs - Higher collateral requirements — locked ADA returned if transaction succeeds - Script size affects fees — optimize for smaller scripts ## Common Transaction Issues - "Insufficient funds for fee" — need more ADA than just transfer amount - "Minimum UTxO not met" — output too small, must include more ADA - "UTxO too fragmented" — many small UTxOs, consolidate with self-transfer - "Collateral required" — smart contract interaction needs collateral UTxO - "Transaction too large" — too many inputs, split into multiple transactions ## Network and Epochs - Epoch is 5 days — staking rewards and protocol updates follow epoch boundaries - Slot every 1 second — blocks approximately every 20 seconds - Hard forks via Hard Fork Combinator — seamless upgrades without chain splits - Testnet (preprod, preview) for development — free test ADA from faucets ## Security - Seed phrase is everything — never share, never enter online - Verify transaction details on hardware wallet screen — software can lie - Check policy IDs for tokens — scam tokens can have same name as legitimate ones - DApp connections don't expose seed — only public key and signing requests - Stake pool changes take effect after epoch boundary — not instant ## NFTs and Metadata - NFTs are native tokens with quantity 1 — no special contract needed - CIP-25 standard for NFT metadata — JSON metadata with image links - Metadata stored on-chain — permanent and verifiable - IPFS commonly used for images — verify IPFS pinning is permanent - jpg.store, cnft.io for marketplace — verify NFT policies before buying ## Governance - Voltaire era introducing on-chain governance — ADA holders vote on proposals - Project Catalyst for treasury funding — community-voted grants - Constitutional Committee, DReps — delegated representation coming - Staking and governance participation can overlap — same ADA, different roles