Crypto glossary
Extended UTXO (eUTXO)
Extended UTXO (eUTXO) is Cardano's ledger model, which adds scripts and attached data to Bitcoin-style outputs so they can support smart contracts.
In Bitcoin's UTXO model, an output holds an amount and a simple locking script. Cardano's extended version lets each output also carry arbitrary data, called a datum, and be locked by a full validator script. To spend it, a transaction supplies a redeemer, and the script checks the datum, the redeemer and the whole spending transaction before approving. Smart contracts arrived on Cardano with the Alonzo upgrade in 2021.
The design keeps the UTXO model's strengths: a transaction's outcome and fees can be calculated before it is submitted, a transaction either succeeds fully or is rejected without charging for failed execution in normal cases, and independent outputs can be processed in parallel. Ergo and some other chains use similar extended models.
Developers coming from Ethereum found eUTXO harder at first. Because each output can be spent only once per block, a single shared contract output, such as a DEX pool, became a bottleneck when many users tried to touch it at the same time, an issue known as concurrency. Protocols solved it with batchers and multiple outputs, adding complexity.
Example
A Cardano DEX order is placed as an output holding the user's tokens and a datum describing the desired swap; a batcher later spends it together with others into the pool in one transaction.