Background on staking

Power of Staking

Here are some important points on Staking

  • Staking is depositing funds into the network. Staking your Cardano (ADA), is like getting a lottery ticket, the more ADA you stake the more lottery tickets you have, the more chances to win a reward. Even better, staking does not cost you anything and is risk free.
  • Staking your ADA is participating in securing the Cardano blockchain. You will get rewarded for your contribution. Your coins remain in your wallet and are not blocked.
  • To maximize your rewards, you can either delegate your ADAs to a professionally run high performance stake pool or create your own. Delegating is easy and accessible to any ADA holders. It is done directly from the Cardano wallets Yoroi and Daedalus It is no more than using the stake power associated with your ADA and choose which stake pool you are being part of. You ADAs stay in your wallet and are not blocked. It is risk free. The rewards are proportional to the amount and time of delegated ADA.
  • A stake pool is a service to delegate your ADA coins. Stake pools gather delegators wanting to participate in the network and receive rewards. Running a stake pool professionally involves technical skills to run computers (nodes) and ensure they stay synchronized with the rest of the network. It involves using industry wide best practices to ensure these servers stay secure, well performing, and most importantly are always online. Running stake pool also implies an important marketing effort to gather a large amount of delegators and optimize the performance of the pool for maximum rewards.
  • There is two ways you can participate in securing the network and win rewards. You can run your own stake pool or you can delegate to an existing one. The more ADA delegated to a stake pool (up to a certain point) the more chances it has to win the opportunity to forge the next page of transactions, also called block - and the rewards are shared between everyone who delegated their stake to that stake pool. Rewards are shared between delegators and stake pool operators for each forged blocks.