What is stake
Holders of the Cardano’s native cryptocurrency ADA (₳) are rewarded additional ADA by taking part in the network consensus.
ADA held on the Cardano network represents a stake in the network, with the size of the stake proportional to the amount of ADA held. The ability to delegate or pledge a stake is fundamental to how Cardano works. As this process is know as Cardano staking, you may also refer to it as Cardano mining.
Here is some more information on what is staking of Cardano coin and how to stake Cardano on mainnet.
ADA holder can earn rewards by delegating their stake to a stake pool. The amount of stake delegated to a given stake pool is one of the ways the network chooses who should add the next block to the blockchain, and receive a monetary reward for doing so. The rewards are shared between everyone who delegated their stake to that stake pool. Some people refer to this process as mining and the pools as Cardano mining pools as this is similar to Bitcoin mining where rewards are “mined” and distributed to the miners.
Delegation is the process by which ADA holders delegate the stake associated with their ADA to a stake pool. It allows ADA holders to participate in the network and be rewarded in proportion to the amount of stake delegated. Incentives are used to ensure the longevity and health of the Cardano network and ecosystem.
If you decide to stake your Cardano (ADA tokens) for a set period of time, you’ll periodically earn a return on your investment. Staking is the process by which validators are selected to create a new block and process transactions and helps the Cardano network. Cardano staking operates on a cyclical basis. Rewards are paid out every “epoch,” or every five days. During the network’s initial launch, there will be epochs in which no rewards are paid out.
Cardano addresses have separate keys for spending and staking. This means that if you decide to stake your ADA tokens, they will never leave your wallet. Plus, Cardano doesn’t require your tokens to be locked in for a term – you can un-stake your tokens at any time. This flexibility sets Cardano apart from its competitors.
Is there any risk when staking ADA?
When delegating your funds to a stake pool, you retain full control of the ADA coins and they are never locked. When spending staked Cardano coins, they are automatically withdrawn from the delegated amount in the stake pool. There is no risk of losing your funds while delegating (no slashing). The stake pool cannot spend your delegated ADA even if the stake pool gets hacked.
How to stake Cardano – Step by step
In this step-by-step guide from our Cardano stake pool explainer series, we will show you how to delegate ADA using Daedalus Miannet Wallet.
Let’s get started!
1. Install Daedalus Mainnet Wallet
Go to daedaluswallet.io/en/download to download and install the latest version of Daedalus Mainnet wallet.
Choose your operating system to get the latest version of the wallet.
2. Create or restore a Cardano wallet
Open Daedalus wallet, accept the default settings: Click on “Continue”.
Review and accept the Terms of Service Agreement: Click on “Continue”.
Once you install the Daedalus Wallet, open it and sync the blockchain. It could take up to an hour.
Then if you do not already have a walled created, you need to create a new wallet. If you have had a wallet before, you can restore it with the restore feature and your recovery phrase.
3. Move your Cardano from your crypto exchange to the Daedalus wallet.
For example if you are looking to do a Binance ADA staking, you first need to move your Cardano from Binance to your Daedalus wallet. Once you move them you are ready to stake.
4. Delegate stake to receive awards
Click on the second icon from the top in the main navigation to access delegate features: Choose “Delegate center”.
Then from the horizontal menu select “Stake pools”.
5. Choose a stake pool
You then need to choose an official stake pool listed in the “Stake pools” tab to delegate your ADA. You can try our stake pool NCA. To do that, type NCA in the search box to find NoCentralAuthority’s stake pool. Here is why you should try the NCA stake pool.
Click on the NCA pool and when the popup shows, click on the “Delegate to this pool” button. Once you do that you will have to verify this action with your password and within a day you stake will be working. You should expect reward in your “rewards” tab for all wallets that you stake.
How to unstake Cardano
You can easily unstake Cardano by moving it to another wallet. Just create another wallet and move your ADA to the new wallet address.
You can also easily stake your ADA to another stake pool, by delegating your wallet to another pool within Daedalus. It usually takes about 5 days for the re-staking to take effect.
Consider staking your ADA with our stake pool with ticker NCA. Read more about the NCA stake pool here.