What is "staking your ADA"?
Cardano is a Proof of Stake network.
Stake Pools run the software that powers the Cardano blockchain. Stake Pools connect with each other to run the Cardano network and to keep it secure.
Stake Pools are randomly chosen by the Cardano network to produce blocks on the blockchain. When they do this, they earn ADA in reward as incentives to operate.
ADA is “staked” by and with Stake Pools. Individuals can delegate their ADA to join a particular Stake Pool, which is the term for staking their ADA and “pooling” their staking power.
The greater the total amount of ADA staked with a particular Stake Pool (up to a defined limit), the more frequently they are likely to be chosen to produce a block on the Cardano network and earn rewards.
These rewards are shared with the individuals who chose to delegate their ADA stake to join that Pool during the 5-day Epoch.
Currently, delegating your ADA to a Stake Pool can earn in the range of 4% – 6% ADA in rewards / interest each year, depending upon the Stake Pools you choose to join.
Incentives are used to ensure the longevity and health of the Cardano network and ecosystem. The incentive mechanism is underpinned by scientific research that combines mathematics, economic theory, and game theory.
Staking ADA with a stake pool is safe and convenient. You use your Cardano wallet to do this.
You never give up control of your ADA:
- It never leaves your wallet
- You can spend / trade / move your ADA at any time.
- You can choose to delegate your ADA to a different Stake Pool at any time (for a small fee of ~0.17 ADA)
Staking rewards are calculated and distributed by the Cardano network, automatically, for each 5-day Epoch.
