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How to stake your Cardano ADA

Before you can learn how to delegate your Cardano stake, you need to understand what Cardano staking actually is. It might seem like a lot to take in, but don’t worry, it’s all pretty straightforward, even if you are new to crypto.

 

Staking is a different form of blockchain validation, which is the security theory that most cryptocurrencies are built around. With Bitcoin (BTC), you’ve heard of Bitcoin mining, or the method by which BTC transactions are validated by the community.

 

However, mining Bitcoin takes tremendous processing power and undermines its “decentralized” nature by giving all the validation control to just a few multimillion-dollar corporations with giant server farms. The little guy can’t compete.

 

With Cardano, which is a proof-of-stake cryptocurrency, mining is not used. Instead, blockchain transactions are validated by “epoch slot leaders.” These are the stake pools that are selected for the given five-day time periods – or epochs – Cardano uses, and they derive their power from everyone in the community who has delegated their Cardano ADA to said pool. Slot leaders are responsible for creating new Cardano blocks and validating them. In return for this work, the pool is awarded ADA coins to distribute to their stake pool members.

If you're interested in learning more about staking your Cardano then you have come to the right place!

 

Staking your ADA is an important part of the Cardano blockchain. It secures the network and gives you a chance to earn rewards. It is also extremely safe as your ADA never leaves your wallet.

 

We hope you enjoy the information below!

What is Cardano Staking

Cardano Staking Rewards

As a reward for their community assistance, those involved in staking Cardano ADA will earn passive income in the form of more tokens whenever their delegate pool validates a block. To get these rewards, however, you must delegate your ADA to a Cardano proof-of-stake pool such as Stork Pool or any of the authorized Cardano stake pools you find in your wallet’s delegation center.

 

This is effectively Cardano coin mining, and the Cardano staking rewards are granted in the form of more Cardano ADA tokens. Instead of only the owners of expensive servers getting all the rewards for block-building and validation, the ADA Cardano staking model allows everyone who owns ADA to contribute and benefit.

 

Cardano staking rewards are distributed automatically. You do not have to take any action to claim your rewards, they will just appear in your wallet. Rewards are earned at the end of each epoch, which lasts for 5 days.

 

Initially there will be some delays in when rewards begin appearing in wallets, but once things are running and more of the block building is taking place among the public stake pools, your POS rewards will flow into your wallet.

What happens to my ADA when I delegate my Cardano stake?

When you delegate to a Stake Pool such as STORK, your ADA stays right where it is, in your wallet. An extra set of keys called 'staking keys' are used to elect a staking pool that represents your ADA. The actuall coins always stay in your account. Be careful and never hand over your private keys!

 

Your delegation essentially translates into a vote for a specific stake pool that you select to work on your behalf to contribute to the blockchain and earn Cardano staking rewards. When you delegate your stake, your ADA is not moved out of your wallet and is not tied up or locked while it is delegated. You can still trade it, sell it, spend it, or redelegate it at any time.

Cardano Staking Wallet Options

In order to delegate Cardano with a stake pool, you need to have a Cardano rewards wallet – that is, you’ll need a Cardano Wallet that is compatible with and supports the Shelley protocol and which will guide you step-by-step in how to stake Cardano coins and how to join a Cardano pool.

 

As long as you have a solid, reputable, reliable wallet, you’ll be able to learn how to stake with Cardano quickly and securely. Currently, the best ADA Wallets for Cardano staking are Daedalus, Yoroi, and AdaLite. You can technically also join a Cardano proof-of-stake pool from select online cryptocurrency exchanges. From a security perspective it is however recommended to not leave your ADA in an exchange.

 

Click on the logos below to get a step-by-step overview of how to stake:

References

Frequently Asked Questions

What is Cardano delegation?

 

Cardano delegation is the method by which individual coin holders can delegate (or stake) their ADA to staking pools and earn Cardano  Essentially, you vote on a pool that represents you.

 

 

How do I stake Cardano?

 

Click on the picture of the wallet you use to open a separate web page with detailed steps.

 

 

What is the Cardano minimum stake?

 

There is no minimum stake. You register your wallet and the total amount in it counts for staking rewards. To delegate to multiple pools with one wallet we recommend using AdaLite.

 

 

How often can I change my stake?

 

You can change your stake any time you like, and you can also remove your coins from delegation at any time. Staking your ADA does not remove the coins from your wallet, so you always have full control over, and access to, your funds. You can even still spend your Cardano while it’s staked!

 

Just be aware that changing the pool that you stake with is a transaction. Each time you change there will be a small transaction fee.

 

 

How often will I get staking rewards?

 

When staking Cardano, rewards will be payed out after every epoch, or every five days. Over the long run, the current model indicates that those who participate in ADA staking will earn a return of about 4.5% on their investment annually. Small pools will not produce a block every epoch but will still give you a similar return.

 

 

Which pools should I stake my Cardano to?

 

The only good option is STORK pool...

 

Just kidding, there are many good pools out there but STORK has the following advantages:

  • A low fee of 1.5%
  • Great hardware
  • High level security
  • Professional management
  • Lots of good karma contributing to a noble cause

 

For more information have a look at our 'home' page.

 

 

What are the Cardano stake pool fees?

 

All reputable stake pools will charge a nominal processing fee to carry some of the operational costs of running the node. This fee is only deducted from the rewards that the pool earns in each epoch. In other words, the pool’s fees are not derived from ADA delegates but are simply taken off the top before the remaining rewards are automatically disbursed proportionally among pool members.

All fees are clearly listed in the ticker box information for each pool as well as on pooltools.io and other similar sites. STORK delegation carries a 340 minimum fixed fee per Epoch, which is the absolute minimum that is allowed, and a 1.5% variable fee which you will find is extremely low. These fees are not withdrawn from your ADA wallet but rather are applied prior to rewards disbursement.

 

 

Are there Cardano transaction fees when staking to a pool?

 

Yes. When you delegate your ADA to a stake pool, you will pay a nominal transaction fee (the equivalent of a few cents in US dollars).

The very first time you delegate your stake you will also pay a 2 ADA deposit which is returned to you when you undelegate your funds.

 

 

What is a Cardano epoch?

 

Cardano’s Ouroboros protocol divides up its delegation staking rewards across five-day periods called epochs. These epochs are the periods during which different stake pools compete with one another to earn slot leader designation, which lets them create and validate new blocks. ADA rewards are disbursed after every epoch.

 

 

What is the difference between proof-of-stake vs. proof-of-work?

 

In short, these are the two main models by which cryptocurrency blockchains are validated. Proof-of-work was pioneered by Bitcoin, where computers have to solve complex algorithms using raw processing power in a race to mine more BTC. The more processing power in the network; the harder the calculations become and therefore the more processiing power you need to actually earn something.

 

Proof-of-stake, which is the model Cardano is based on, is quite different. Instead of processing power, rewards get distributed based on the amount of delegated ADA. Cardano nodes therefore need way less processing power. This helps to keep our energy consumption at a minimum.

 

 

How does Cardano proof-of-stake work?

 

The technical aspects of Cardano’s delegate system and PoS platform have been five years in the making and can’t be explained in detail here. However, we have covered the basics above. Simply put, Cardano’s proof-of-stake model allows ADA holders to delegate their ADA to larger collective pools. The pools build and validate blocks on the blockchain and earn rewards for its delegates. To keep the platform decentralized, the biggest pools will experience temporary saturation and a proportional reduction in rewards, encouraging delegates to put their coins in other smaller pools.

Many thanks to ADASTRONG who gathered all this information and wrote this guide. Have a look at: https://www.adastrong.com/