How to earn passive income with Cardano

Cardano passive income

The Cardano blockchain with its cryptocurrency ADA is a passive income generating cryptocurrency. ADA will provide staking rewards to all paricipants into the network that stake their cryptocurrency. This process is called “delegation”. Staking helps the blockchain secure and is part of block generation and transaction validation.

What are Cardano rewards and how are they generated

In order for a blockchain system to be operational, there are nodes that need to validate the transactions. In the case of Cardano, these nodes are called “stake pools”.

All transactions on the blockchain should be validated and stored into blocks into the blockchain. This costs a transaction fee.

These fees as well as the inbuilt algorithm of the blockchain is what participants can receive as awards in exchange for them validating these transactions and keeping the blockchain operational. Every ADA holder can participate and to generate rewards.

There is no minimum stake required. Depending on your initial investment and your stake pool selection, your monthly rewards may vary.

Rewards are usually a percentage of the staked ADA. Currently the rewards are around 3% to 7% of the staked amount and the percentage you receive is influenced the most by your stake pool selection. Please note that if you delegate to a faulty stake pool, oversaturated stake pool or stake pool that has bad internet connectivity and regularly goes offline, your rewards could be greatly reduced.

The first payout could be expected to happen about 4 epochs (around 20 days) after the initial stake. Read more about the process below.

How to start generating passive income with Cardano

  1. Buy Cardano (ADA) on a Crypto Exchange. We have a separate post about how to buy Cardano as well as the popular exchanges.
  2. Move your ADA coins to a wallet, that supports staking. We recommend downloading the latest Daedalus Wallet from the official website here. Read more about the different Cardano wallets.
  3. Send your ADA coins from your crypto exchange to your Daedalus Wallet.
  4. Choose a good staking pool that will generate your a good reward. Here is a great guide on how to select a good staking pool for your ADA.
  5. Stake your coins so they can start producing staking rewards. Here is how to stake your coins.
  6. Once you stake your coins, you need to wait 2 epocs (around 10 days) for your coins to start working for you. You will receive the first payouts 4 epochs after staking which is about 15 to 20 days after staking.

Cardano delegation cycle

This is the full delegation cycle of Cardano, explained by the following graphic:

Please note that you will receive delegation rewards only when you stake to a healthy stake pool. Here is more information on what is a healthy pool and how to choose one.

Draven Flash

Draven Flash is an IT professional with 20 years of network, server administration and security experience. Avid Cardano/ADA enthusiast since 2017.