Cardano runs a lottery for every block. Its protocol, Ouroboros, splits time into one-second slots and draws a winner for each, with each stake pool's chance set by the amount of ADA delegated to it. The random seed comes from the chain itself rather than from any one participant, and only the winner knows it has won.
Cardano runs a lottery for every block. Its protocol, Ouroboros, splits time into one-second slots and draws a winner for each, with each stake pool's chance set by the amount of ADA delegated to it. The random seed comes from the chain itself rather than from any one participant, and only the winner knows it has won.
That last part is the interesting bit, and it is the reason the design exists. This guide explains how the draw works, why the result has to be unpredictable, and what Cardano's habit of publishing a paper before writing the code costs it.
Why the winner has to be unpredictable
Picking a block producer looks like a fairness question. It is really a security question.
Suppose the schedule were public an hour ahead. Anyone who wanted a particular transaction kept out of the chain would know exactly which machine to flood with traffic, which operator to approach, and when. Knocking that one node offline for a few seconds would be enough. Repeat it, and a small number of attackers can decide what gets written.
There is a second problem. If any participant can influence the random draw, even slightly, it can hand itself extra turns. Enough extra turns and it controls the order of transactions and eventually the contents of the chain.
So the protocol needs two properties at once. The draw must be random in a way nobody can steer, and the result must stay hidden until the moment it is used. Cardano's documentation singles out the ability to "generate unbiased randomness in the protocol's leader selection algorithm" as a distinguishing feature of the first version of Ouroboros. Leader selection is simply the process of choosing which participant leads, meaning which one is allowed to make the next block. The later Praos version added private leader selection, so that a producer cannot be attacked before it acts.
How the draw works
Cardano uses proof of stake. Instead of competing to solve puzzles, participants are chosen in proportion to the amount of the network's own token they have committed.
Two terms do most of the work here:
- A stake pool is a node run by an operator, producing blocks on behalf of many holders at once. Running one takes a server that is online continuously, so most holders do not run their own.
- Delegation is how a holder assigns the weight of their ADA to a pool. The coins stay in the holder's wallet. They are not locked, not transferred, and remain spendable. Only the weight moves.
Time is then cut into fixed units.
| Term | What it means | Value |
|---|---|---|
| Slot | The smallest unit of time, and the unit a draw is held for | 1 second |
| Epoch | The accounting period after which stake figures and the seed roll over | 432,000 slots, or five days |
| Active slot coefficient | The share of slots expected to produce a block | 0.05, so roughly one block every 20 seconds |
Most slots pass empty, by design. The gaps give blocks time to reach the whole network before the next one is made. A pool holding one per cent of the delegated stake expects about one per cent of an epoch's blocks, but short runs vary, and a small pool can go a long time without a turn.
Where the randomness comes from
Each epoch has a seed. The seed is built from values contributed by the producers of the previous epoch, so no single participant supplies it and no single participant can choose it. The stake figures and the seed are both fixed before an epoch starts, which means the schedule cannot be edited while it is running.
Each pool then holds a private key for a verifiable random function, or VRF. A VRF produces two things: a number that looks random, and a proof that the number was computed correctly from that key and that input. For every slot, a pool computes its own VRF value. If the value falls below a threshold set by its share of the stake, the pool is the leader for that slot.
Nobody else can run that calculation, because nobody else has the key. The pool learns it has won; everyone else finds out when the block appears, with the proof attached, and can verify in a moment that the win was genuine.
This is what removes the attack window described above. There is no published list of who is next. Occasionally two pools win the same slot, and the chain has fixed rules for settling which block survives.
What peer review costs
Cardano's documentation calls Ouroboros "the first blockchain protocol based on peer-reviewed research", and describes the platform as the first "to evolve out of a scientific philosophy and a research-first driven approach". In practice, a substantial change is written as a paper, sent for review by academics outside the project, and only then built.
The gain is that the security argument is stated and checkable before anyone's money depends on it. The cost is time, and it is a real cost rather than a small one.
On-chain governance is the clearest example. The chain launched in 2017. The design, CIP-1694, was published and debated in public for a long stretch before it ran anywhere. It activated with the Chang hard fork on 1 September 2024. A hard fork is an upgrade that changes the rules in a way older software will not accept. Cardano performs these with a hard fork combinator, which its documentation describes as combining protocols so the transition happens without system interruption or restart: nodes update gradually rather than all at once, and the chain keeps one unbroken history across both eras.
Even then it arrived in stages. An interim constitutional committee was seated first, with delegate representatives and treasury voting following. That is the method working as intended, and it is also why the distance between an announced Cardano feature and a running one is measured in years.
The three bodies CIP-1694 created
Governance decisions are split across three groups, so that no one of them can act alone.
| Body | Who they are | Role |
|---|---|---|
| Constitutional committee | A limited membership, seated in interim form at the Chang fork | Judges whether a proposed action is constitutional |
| Delegate representatives (DReps) | Anyone who registers as one; ADA holders delegate voting power to them | Vote on governance actions on behalf of holders |
| Stake pool operators | The operators already running block-producing nodes | Vote on the categories of action reserved to them |
Delegation happens twice, in parallel. The same ADA balance sets a pool's chance in the block draw and a delegate representative's weight in governance, but they are separate on-chain certificates with separate recipients: a holder can back one stake pool for block production and an unrelated representative for voting. That is why ADA is described as both securing the network and voting in it.
None of this is a recommendation to delegate, or to any particular pool. Tradergy does not evaluate pools.
Where to look next
- Cardano price in Australian dollars - the live figure, with its source and timestamp.
- Crypto prices in AUD - the rest of the coin pages.
- Glossary - plain definitions of the market terms used across the site.
- Guides - the other explainers in this hub.
Sources
- Ouroboros overview, Cardano developer documentation, as of September 2026.
- Introduction, Cardano developer documentation, as of September 2026.
- CIP-1694: a first step towards on-chain decentralised governance, Cardano Improvement Proposals repository.
- Ouroboros: a provably secure proof-of-stake blockchain protocol, Kiayias, Russell, David and Oliynykov, Cryptology ePrint Archive.
- Chang upgrade #1 hard fork achieved, Intersect, September 2024 - the phased governance rollout.
- Ouroboros Praos: an adaptively-secure, semi-synchronous proof-of-stake blockchain, David, Gazi, Kiayias and Russell - the private leader test, the stake-proportional threshold, and empty slots.
- Consensus and staking, Cardano Developer Portal - the epoch seed drawn from the previous epoch, and the stake distribution taken from two epochs back.
- Hard forks, cardano.org - the 2017 launch and the Chang date.
General information about how a public blockchain protocol works, not a recommendation to hold, delegate or transact in any asset, and not a suggestion about any stake pool. Tradergy keeps no account and collects no personal data. Reviewed by the Tradergy editorial team, September 2026.
Common questions
How does Cardano choose who makes the next block?
By a random draw held for each one-second slot. Every stake pool's chance of winning a given slot is proportional to the amount of ADA delegated to it. The draw is run locally by each pool using a shared random seed taken from the chain's own recent history, and a winning pool publishes a cryptographic proof alongside its block so anyone can check the win.
What is Ouroboros?
Ouroboros is the family of proof-of-stake protocols that Cardano runs on. Cardano's documentation describes it as the first blockchain protocol built on peer-reviewed research. Its job is to decide, second by second, which participant is allowed to add the next block, and to make that decision in a way nobody can predict or bias.
What is a Cardano epoch?
An epoch is a fixed block of time used for accounting. Cardano's epoch is 432,000 slots of one second each, which is five days. The stake figures and the random seed used for an epoch's draws are fixed before the epoch begins, so the schedule of winners cannot be altered once it is running.
What does delegating ADA to a stake pool actually do?
It assigns the voting and block-production weight of your holding to a pool without moving the coins. The ADA stays in your own wallet, is not locked, and is not transferred to the pool operator. The pool runs the machine that produces blocks; delegation only supplies the weight that decides how often it wins a draw.
Why does Cardano take a long time to release new features?
Because substantial protocol changes are written up as academic papers and reviewed outside the project before they are implemented. The chain launched in 2017 and on-chain governance activated with the Chang hard fork on 1 September 2024, in phases rather than at once. Long gaps between a published design and running code are a direct cost of the review step.