Classifying Cardano according to the International Token Classification (ITC) framework

What is Cardano?

Cardano is a third-generation proof-of-stake blockchain founded by Charles Hoskinson, a co-founder of Ethereum. Because of this, it is natural to assume that Cardano and Ethereum are similar in various aspects. They could even be seen as competitors. However, there are some key differences between Cardano and Ethereum, most notably the extensive research, peer-review, and testing conducted by Cardano before each upgrade. Cardano’s proof-of-stake system “Ouroboros” is the first academically researched and peer-reviewed PoS with a mathematically proven level of security.

First-, second-, and third-generation blockchains

With Cardano claiming to be a third-generation blockchain platform, let us quickly review what is meant by the three generations of blockchains.

Cardano’s native token: ADA

The ADA token is the native token of the Cardano network. Its main purposes are:

  • Governance: The Cardano governance model is based on true democracy — in which individuals are incentivized to play a role and vote. It is a way for token holders, not the miners, to decide the future of a platform, and for the community to dictate the use of Cardano’s treasury funds. ADA holders can vote for new upgrades, changed transaction fees, overall governance, and much more. The weighted value for the votes is calculated based on the number of tokens held.
  • Staking: ADA is staked as part of their consensus mechanism to successfully verify transactions on the blockchain. Staking ADA is rewarded with new Cardano ADA tokens.

The classification of ADA according to the ITC:

In Figure 1, you can see the full classification of the ADA token as it is available in Tokenbase. The token is fully classified according to the six current dimensions of the ITC, which we now explain in more detail.

Figure 1: The ADA token is fully classified (Source: https://itin.itsa.global/73H6F0SN7)

The International Token Standardization Association (ITSA) e.V.

The International Token Standardization Association (ITSA) e.V. is a not-for-profit association of German law that aims at promoting the development and implementation of comprehensive market standards for the identification, classification, and analysis of DLT- and blockchain-based cryptographic tokens. As an independent industry membership body, ITSA unites over 100 international associated founding members from various interest groups. In order to increase transparency and safety on global token markets, ITSA currently develops and implements the International Token Identification Number (ITIN) as a market standard for the identification of cryptographic tokens, the International Token Classification (ITC) as a standard framework for the classification of cryptographic tokens according to their inherent characteristics. ITSA then adds the identified and classified token to the world’s largest register for tokens in our Tokenbase.

  • The International Token Identification Number (ITIN) is a 9-digit alphanumeric technical identifier for both fungible and non-fungible DLT-based tokens. Thanks to its underlying Uniform Token Locator (UTL), ITIN presents a unique and fork-resilient identification of tokens. The ITIN also allows for the connecting and matching of other media and data to the token, such as legal contracts or price data, and increases safety and operational transparency when handling these tokens.
  • The International Token Classification (ITC) is a multi-dimensional, expandable framework for the classification of tokens. Current dimensions include technological, economic, legal, and regulatory dimensions with multiple sub-dimensions. By mid-2021, there will be at least two new dimensions added, including a tax dimension. So far, our classification framework has been applied to 99% of the token market according to market capitalization of classified tokens.
  • ITSA’s Tokenbase currently holds data on over 4000 tokens. Tokenbase is a holistic database for the analysis of tokens and combines our identification and classification data with market and blockchain data from external providers. Third-party data of several partners is already integrated, and API access is also in development.

Remarks

If you like this article, we would be happy if you forward it to your colleagues or share it on social networks. More information about the International Token Standardization Association can be found on the Internet, on Twitter, or on LinkedIn.

References

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
International Token Standardization Association

International Token Standardization Association

283 Followers

The International Token Standardization Association (ITSA) is a not for profit organization working on holistic market standards for the global token economy.