Ethereum vs Cardano: Comparing Two Leading Programmable Blockchains

Explore the differences between Ethereum and Cardano, two leading programmable blockchains.

Introduction

Ethereum (ETH) is the standard to which every programmable blockchain protocol is compared. Vitalik Buterin introduced Ethereum in a 2014 white paper and partnered with several others, including Charles Hoskinson, to bring the project to fruition in 2015. Unlike Bitcoin (BTC), Ethereum is an open-source software platform that has pioneered smart contracts and decentralised applications (dapps), providing utility beyond transacting and storing value.

Today, Ethereum’s robust network of ERC-20 tokens, non-fungible token (NFT) marketplaces, GameFi, and decentralised finance (DeFi) tools makes it the most-used blockchain platform and a favourite amongst crypto traders. However, Ethereum is often criticised for slow transactions that compromise some of its functionality.

Hoskinson left Ethereum and launched Cardano (ADA) in 2017 to create a more sustainable ecosystem for cryptocurrencies through peer-reviewed research. Cardano describes itself as a “third-generation blockchain” because it builds on the protocols before it, maintaining Ethereum’s smart contract capabilities but splitting the computational load between two layers to ease congestion.

Cardano was also the largest blockchain with a Proof of Stake (PoS) consensus mechanism when launched, reducing its environmental impact while enhancing security. It supports NFTs, play-to-earn (P2E) gaming, and DeFi. However, critics argue the platform isn’t decentralised due to Hoskinson’s continued influence through Input Output Hong Kong (IOHK), a private company. 

Ironically, the networks have adopted each other’s ideas since Hoskinson left Ethereum, which became a PoS protocol following ‘The Merge’ in 2022. Meanwhile, IOHK has plans to step back and allow Cardano’s community to govern the platform like Ethereum moving forward. 

Let’s look at these two programmable blockchains with divergent architecture and approaches. 

Key Differences Between ETH and ADA

Ethereum Overview

Ethereum is an open-source software platform that enables the creation of dapps and smart contracts without downtime, centralised control, or outside interference. Its native digital currency is ETH. Vitalik Buterin first described Ethereum in a 2014 white paper and launched the platform with several co-founders in 2015 with the purpose to expand blockchain’s functionality beyond the mission Satoshi Nakamoto established for Bitcoin. 

Ethereum’s blockchain is programmable, allowing developers to build apps and launch altcoins on it rather than create a new ecosystem for every project. This versatility helps ETH power NFTs, video games, DeFi applications, and multiple altcoins. Developers build on Ethereum by following established standards, such as ERC-20 for tokens and ERC-721 for NFTs, but they also continue to grow the ecosystem, consistently adding new functionality. 

Always evolving, Ethereum is noticeably different today than in 2015. The biggest change was ‘The Merge’, an event on 15 September 2022 that saw Ethereum switch from a Proof of Work (PoW) consensus mechanism to PoS, with Ethereum’s energy consumption falling by an estimated 99.95% afterwards. Network throughput did not immediately increase, but The Merge prepared it for subsequent updates that could expedite transaction processing in the future. 

Check out Ethereum’s current value and recent price trends. 

Cardano Overview

Charles Hoskinson co-founded Ethereum alongside Buterin, but the two clashed when it came to addressing Ethereum’s shortcomings. There were a number of philosophical and technical disagreements, including that Hoskinson wanted to pursue venture capital and create a private business out of Ethereum, while Buterin wanted to keep it nonprofit. Hoskinson left Ethereum and launched a company called IOHK with co-founder Jeremy Wood in 2015 to develop blockchains using a science- and research-based methodology. Their work led to Cardano’s creation on 29 September 2017. Today, Cardano is backed by IOHK, The Cardano Foundation, and Emurgo. 

Cardano differentiated itself from Ethereum in two key ways when it launched. First, it introduced a layered blockchain software stack that was both flexible and scalable, as Ethereum’s blockchain is monolithic, meaning everything takes place on one chain. Cardano’s network has two layers: the settlement layer, which has a unit of account, and the control layer, which runs smart contracts. This architecture allows independent upgrades to each chain while Cardano still performs advanced functions through the links between them.

Cardano’s other major differentiator is Ouroboros, a PoS consensus mechanism designed to balance energy efficiency, security, and decentralisation. The platform’s evolution is divided into eras named after famous academics, with each era having specific goals. The launch of the native currency ADA occurred during the ‘Byron Era’, and staking and decentralisation features were introduced during the ‘Shelley Era’, which began on 29 July 2020. The ‘Alonzo Era’ started on 12 September 2021 and introduced smart contract capabilities and dapps to the network, and the ‘Conway Era’ began on 4 September 2024, introducing the first decentralised governance features to Cardano. 

Check out Cardano’s current value and recent price trends. 

Ecosystem Comparison: ETH and ADA

Ethereum and Cardano’s Consensus Mechanisms

Ethereum used a PoW consensus mechanism before The Merge, where miners used powerful computers to try solving complex math puzzles, with the winner adding a block to Ethereum’s blockchain and claiming all associated transaction fees and a set block reward. This system was secure, but the computers demanded a lot of energy and specialised hardware that the average person didn’t have. Hoskinson left Ethereum in part due to these issues. 

Cardano’s Ouroboros consensus mechanism divides the blockchain into ‘epochs’, which are further broken down into time slots. During each time slot, the system uses a cryptographic randomisation process to select a staking pool to propose a new block; pools with larger amounts of ADA staked have higher chances of selection, but their returns are capped. Staking pools earn ADA rewards for successfully adding blocks and must distribute those rewards proportionally to their operators and delegators based on their stake. The cap gives larger staking pools diminishing returns and helps to reduce centralisation.

Following The Merge, Ethereum adopted a PoS consensus mechanism that works similarly to Cardano’s. Validators (Ethereum’s staking pools) stake ETH to a smart contract, and one validator is randomly chosen to propose a block for each slot; a committee of validators is selected to verify it. The odds of selection are proportional to the amount of ETH staked, and validators can accept delegations from ETH holders to increase their chances. Rewards are distributed proportionally amongst validators and delegators. 

While Ethereum’s PoS system shares similarities with Cardano’s Ouroboros, it does not divide the blockchain into epochs or use a time-slot structure, focusing instead on immediate block finality. The committee structure keeps the network load manageable. ETH also does not cap the rewards for larger staking pools, though it does implement protections like ‘slashing’ if validators abuse the system.

Ethereum and Cardano Scalability

The Merge has improved Ethereum’s scalability, but it lags behind many competing PoS protocols. The network averages about 16 transactions per second (tps), according to Chainspect, with a recorded max of 62 and a theoretical cap of 119. 

Cardano is slower than Ethereum, with just under two tps, and a recorded max of 11.5 and a theoretical cap of 18. Cardano was the first major PoS protocol, prioritising security, decentralisation, and energy efficiency over speed. Competitors like Solana (SOL) sacrifice some of the decentralisation of ADA, resulting in the ability to process thousands of transactions per second. 

Tokenomics Comparison

Ethereum Use Cases

As the ecosystem’s native cryptocurrency, ETH is used to pay gas fees, secure the Ethereum network through staking, and access dapps. It also serves as a secure value store that holders can swap for fiat currencies or other cryptocurrencies, especially ERC-20 tokens. ETH’s high liquidity simplifies exchanging it for other currencies through trustworthy platforms like Crypto.com. In recent years, ETH has gained popularity in the broader market thanks to products like exchange-traded funds (ETFs). 

Acceptance as a Payment Method

Ethereum is one of the best-known cryptocurrencies and processes transactions more quickly than Bitcoin’s seven tps, so most merchants accepting crypto accept ETH. Some examples include the Travala travel booking platform, KingoFood premium Italian cuisine, and Play-Asia.com. ETH holders can also purchase popular gift cards or pay with crypto using services like Crypto.com Pay. 

Cardano Use Cases

ADA is the native token of Cardano’s ecosystem and used for staking, gas fees, and accessing the network’s dapps. It is exchangeable for fiat currencies and other cryptocurrencies, but its lower liquidity may produce higher spreads when exchanging for fiat. Many reliable platforms allow traders to buy, sell, and hold ADA. 

Acceptance as a Payment Method

More vendors accept ETH than ADA, but some accept ADA payments. Examples include HostMeNow and the specialist computer company Mineshop. Traders can also use ADA to purchase popular gift cards or virtually anything through services like Crypto.com Pay. 

Key Pricing Moments

Cryptocurrencies frequently experience substantial price swings based on world events, prominent influencers, market sentiment, and the laws of supply and demand. Ethereum and Cardano are no exception. Below is a brief timeline of each token’s price history:

Ethereum — Key Price Events

Cardano — Key Price Events

Performance and Market Metrics

Ethereum trails only Bitcoin by most metrics, ranking second with a $262 billion market capitalisation as of this writing. ETH is inflationary since staking rewards constantly add new tokens to the ecosystem, but the robust demand for the network’s dapps and altcoins gives ETH a price range of $2,100–$3,800 with price upside potential. ETH has no maximum supply, with about 120.6 million tokens in circulation, giving it a lower float than many other PoS protocols. 

Cardano has a market cap around $30 billion as of this writing. ADA is not entirely inflationary, but it does have a large supply. Staking rewards will continue to add new tokens to its ecosystem until the maximum supply of 45 billion is reached. ADA’s circulating supply is currently about 35 billion, and the price of each token is generally within the $0.30–$1.30 range. 

Developments and Roadmaps: ETH and ADA

Ethereum’s Roadmap

Ethereum’s roadmap focuses on four major areas: cheaper transactions, extra security, better user experience, and future-proofing. Its community pursues all of these at once, often through multiple angles. For instance, the platform already uses rollups, or Layer-2 blockchains, to batch transactions together and send the output to the mainnet to reduce fees. Zero-Knowledge (ZK) rollups are expected to lower fees by up to 100 times.

Ethereum has also considered sharding to improve network performance, though it was dropped from the roadmap as of this writing. Still, Buterin sees several paths to achieve 100,000 tps or greater, but there is no set time frame for anything on Ethereum’s roadmap.

Ethereum’s Community

A cryptocurrency’s value is often related to market sentiment, with social media a strong indicator of engagement and interest. Ethereum enjoys a large following on social media with 3.7 million X followers and 3.7 million Reddit followers as of this writing, indicating a strong, passionate user base. 

Cardano’s Roadmap

Cardano’s roadmap heavily emphasises decentralisation features in the current ‘Voltaire Era’. IOHK is taking a step back from day-to-day network governance, instead allowing stakeholders to vote on the project’s future. A treasury sourced from transaction fees is also planned to fund future development. Cardano’s evidence-based approach to blockchain development is admirable, but it means the protocol frequently lags behind competitors. Many blockchains launch with on-chain governance features, and Cardano’s community is focusing on adding them now, rather than increasing throughput or community awareness. 

Beyond governance, Cardano is making waves in the industry thanks to its potential to significantly scale. An event in late 2024 showed that its Hydra Layer-2 solution was able to handle 1 million tps. 

Cardano’s Community

Cardano has 1.4 million X followers and 719,000 Reddit followers as of this writing, indicating a large community that may not engage on a day-to-day basis. 

Conclusion

Cardano was built to be better than Ethereum, but the two protocols have more similarities than differences. Both host a variety of altcoins, dapps, and NFTs, and both utilise a PoS consensus mechanism, marketing themselves as ‘green’. However, they have different tokenomics, and which is better depends on the intended use case. 

Merchants might prefer either since ETH is more recognisable, while ADA provides relative price stability. Speculators might prefer either since ETH offers price upside potential due to scarcity and brand recognition, while ADA offers accessibility. Developers may prefer Ethereum since it’s a more active blockchain network. 

Always research a token’s value, development team, price trends, and roadmap before considering a purchase. 

Due Diligence and Do Your Own Research

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