# The ada token: definition and functionality Ada (from 19th-century English writer and mathematician Ada Lovelace) is Cardano's native digital currency. It is the sole means to pay for transactions on the Cardano blockchain. Formal ledger rules determine the effects of these ledger transactions, yielding an immutable and independently verifiable record that tracks the movement of ada and other assets over time. Transactions are authorized using secure cryptographic keys that are owned by the ada holder. As described below, ada holders can opt to *stake* their ada holding in order to participate in the Ouroboros proof-of-stake consensus mechanism, which determines how transactions are included in successive Cardano blocks. They receive rewards for this in proportion to the stake that has been delegated. In addition, ada allows holders to: * participate in governance activities, including voting on Catalyst ecosystem proposals * pay for the costs of creating and transferring assets such as Non-Fungible Tokens (NFTs) * pay for the costs of using smart contracts * pay for the costs of recording data on the blockchain * transfer ada tokens to other users 1 ada is divided into 1,000,000 lovelace. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://cardano-wiki.gitbook.io/cardano/how-does-cardano-work/table-of-contents/financial-aspects/the-ada-token-definition-and-functionality.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.