The Cardano Settlement Layer (CSL) is one of the two layers that make up the Cardano blockchain platform–the other layer is the Cardano Computation Layer (CCL). Cardano is a decentralized blockchain and cryptocurrency project that was developed by Input Output Hong Kong (IOHK) and is known for its research-driven approach to development.
The CSL is specifically designed to handle the settlement of transactions, meaning it is the layer responsible for the transfer of value between users. This includes the handling of ADA, Cardano’s native cryptocurrency. The main purpose of the CSL is to offer a secure and efficient environment for transferring digital assets.
Key features of the CSL include:
- Security: The CSL is built to be highly secure, utilizing the Ouroboros consensus algorithm, which is a proof-of-stake protocol. This protocol ensures the integrity and security of transactions on the network.
- Scalability: The CSL is designed to scale efficiently, allowing it to handle a large number of transactions as the network grows.
- Interoperability: Cardano’s CSL aims to facilitate interoperability with other blockchains and financial systems, allowing for easier integration and exchange of assets.
- Multi-Currency Support: The CSL supports not just ADA, but also other digital assets, which can be created and managed on the Cardano network.
Explain Like I’m Five Years Old (ELI5)
The Cardano Settlement Layer (CSL) is like the cash register in a store. When you buy something, the cash register handles the money part, making sure you pay the right amount and the store gets the right payment.
In the Cardano blockchain, the CSL is responsible for handling all the money transactions. It keeps track of who owns what and makes sure that when someone sends money (like the cryptocurrency ADA), it goes to the right place securely. Think of it as the part of the system that makes sure all the money transfers happen smoothly and safely.
Summary
In summary, the Cardano Settlement Layer is the foundational layer of the Cardano blockchain that focuses on ensuring secure, scalable, and efficient transactions of digital assets.
Purpose: Handles the basic, core functionality of the blockchain—transferring and tracking ADA (Cardano’s cryptocurrency) between users.
Key Function: Manages transactions, records balances, and ensures that the ledger is secure and immutable.
Simplest Explanation: Think of it as the “money layer”—where ADA is sent, received, and stored securely, just like a simple ledger for cryptocurrency transactions.
💡 Helpful References
Designing in Layers 🟡
https://iohk.io/en/blog/posts/2022/08/05/layer-1-layer-2-all-you-need-to-know/
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