Founded in 2015 by Ethereum co-founder Charles Hoskinson, Cardano is a blockchain that operates on the proof-of-stake (PoS) principle, often referred to as the "Ethereum killer" due to its superior technology, high level of security, and sustainability. Like Ethereum, Cardano also allows users to stake their native token to earn staking rewards. Cardano enables individual users to stake through stake pool operators, combine their tokens with other users, or launch their own Cardano staking pool.
Table of Contents:
- Epochs in Cardano
- How to Stake Cardano (ADA)
- Exchanges and Cryptoprojects for Staking Cardano (ADA)
- Risks of Cardano Staking
Epochs in Cardano
Cardano divides time periods into epochs, which are used to indicate when network events should occur, such as rewards distribution or assignment of transactions to validators. In Cardano, each epoch consists of 432,000 slots, smaller units of time further divided into one-second intervals. One Cardano epoch lasts approximately five days. After each epoch completes, a snapshot records the distribution of staked ADA tokens. This is used to calculate the rewards that each staking participant will receive.
How to Stake Cardano (ADA)
Staking via Exchange
Below is a step-by-step guide:
| Step | Description |
|---|---|
| Step 1 | Find a reliable cryptocurrency exchange |
| Step 2 | Choose the staking option |
| Step 3 | Explore staking pools |
| Step 4 | Delegate your ADA tokens |
Staking your ADA with independent SPOs instead of centralized exchanges (CEX) helps maintain the decentralization of the Cardano ecosystem and offers advantages such as full independence and direct control over your own funds, as well as the opportunity to invest in pools of your choice.
The steps to stake ADA with stake pool operators are as follows:
- Create an ADA wallet: For ADA staking, users will need a wallet that supports staking. They can use any of the wallets that support Cardano, such as Daedalus or Yoroi.
- Transfer ADA to your wallet: Once users have a staking-supporting wallet, they can transfer their ADA from an exchange or any other source to the wallet.
- Select a stake pool: Users can find a list of stake pool operators on the Cardano website or community forums. Explore the available options, compare their profitability, fees, and other factors, and choose a pool that meets your criteria.
- Delegate your ADA: After selecting a stake pool, users can delegate their ADA to the pool by following the instructions provided by their wallet.
- Receive rewards: Once users have delegated their ADA, their wallet will start receiving rewards from the stake pool.
It's important to note that users don't need to transfer their ADA to the stake pool operator to participate in staking. This means they can maintain full control over their funds and withdraw them at any time.
Where Can You Stake Your Cardano (ADA) on Exchanges and Cryptoprojects?
How to Stake Cardano on Binance
According to Binance, users can stake ADA on the exchange and earn up to 6.1% APY. Users can also receive weekly staking rewards and unlock them at any time to access their funds without waiting for a lock-up period. To start staking on Binance, follow these steps:
- Create an account on Binance.
- Visit the "Staking" homepage on Binance.
- Ensure that your Binance spot wallet has sufficient funds.
- Select ADA from the list of tokens provided on the page.
- Read and follow the on-screen prompts for staking on the platform. Click "Next".
- A "Stake Crypto" pop-up window will appear. Enter the desired amount for staking or select a percentage of total assets to be staked.
- To automatically restake rewards for the tokens, select "Auto Restake". This will automatically increase your staking rewards. To have the staking rewards credited to your wallet, select "Disable Auto Restake".
- Click "Preview Stake". Review the details and click "Confirm".
How to Start ADA Staking on eToro
eToro offers its users the convenience of automatically staking supported cryptocurrency assets, such as ADA and Ethereum, on behalf of the users. Therefore, no additional steps are required for ADA staking on eToro. Once a user has created an account and added ADA to their eToro wallet, they can automatically earn staking rewards.
Risks of Cardano Staking
Cardano staking is an attractive way to generate passive income, but there are some risks that users should consider. For example, potential earnings from ADA staking are not fixed and highly depend on several factors, including the amount of ADA staked, the yield of the staking pool, and the fee charged by the staking pool.
Lastly, Cardano staking rewards are highly influenced by market prices. So, if the price of ADA decreases, users may receive less income than expected. As with any investment, it is important to research and understand all associated risks before staking ADA on the Cardano network.
