How Insurance Works

Cardano Blackboard Series #4: What is the transaction assurance level?

What is the transaction assurance level? If you are using Yoroi or another wallet, you will certainly have noticed this indicator already. When sending or receiving ADA, it changes from low to medium, and from medium to high. But what does this mean? In Cardano, every 20 seconds a new block is created. It verifies and records any new transactions Each block is connected to the previous block. The transactions in that previous block are then said to have been confirmed by the Cardano network. So, the higher the assurance level, the more confirmations the transaction has, and the less likely it is to be reversed. Low assurance means there are less than 3 confirmations. Medium assurance means there are 3 to 8 confirmations. High assurance means there are 9 or more confirmations. Note that, already, 3 block confirmations give you a 95% certainty that this transaction is safe and irreversible, which is pretty high, and should be sufficient for most transactions. Nine block confirmations, however, give you a 99.9% certainty that this transaction is safe and irreversible. If you transfer a huge amount of ADA, you may want to wait for this assurance level. Thank you for watching! You

Reader Comments

  1. How can you wait for a high assurance level, does the assurance level not increase once you’ve already sent or received your transaction?

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