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What is EUTXO?

EUTXO stands for Extended UTXO model. Cardano's EUTXO combines and matures Bitcoin's security and Ethereum's programmability. This model is vastly superior to the account-based model used by other blockchains because it ensures:

  • Enhanced security: every transaction uses a different address, which makes it impossible to track the address or find out the user’s overall balance.

  • Scalability: UTXO ledgers allow for transaction parallelization, which reduces congestion.

  • Interoperability: due to the implementation of off-chain and sidechain protocols, it is easier to establish interoperability between different blockchains.

  • Determinism: on the UTXO ledger, a user can predict the cost and validity of a transaction before it is processed on the chain. Transaction costs are also much lower in the UTXO model as there are no ‘gas’ fees.