Founded in 2015 by Ethereum co-founder Charles Hoskinson, Cardano is a Proof-of-Stake (PoS) blockchain that is often dubbed the “Ethereum killer” due to its superior technology and high level of security and sustainability.
Similar to Ethereum, Cardano also allows users to stake its native cryptocurrency ADA to earn staking rewards. Cardano allows individuals to stake via staking pool operators and pool their tokens with other users or run their own Cardano staking pool.
Staking pools are often run by people who have the technical experience and the appropriate hardware to stake effectively on the Cardano network, although anyone can become their own staking pool operator. Users also have complete autonomy to decide which pool they prefer to join and can rate each pool based on pool size, uptime and past performance.
Cardano divides time periods into epochs, a measure of time used to indicate when events should take place on the network, such as: B. the distribution of incentives or the allocation of validator transactions.
On Cardano, each epoch consists of 432,000 slots, smaller units of time further divided into one-second intervals. A Cardano epoch lasts about five days. At the conclusion of each epoch, a snapshot records the distribution of staked ADA tokens. This is used to calculate the rewards each player will receive.
Users wishing to participate in staking enter a pool by delegating, which allows coins to be unstaked and re-staked multiple times with different pools, provided that the user waits for the end of the current epoch before shifting their wealth.
Steps to staking Cardano (ADA)
Below is a step-by-step guide to staking Cardano:
Find a reputable cryptocurrency exchange
The first step is to find a cryptocurrency exchange that supports ADA trading and staking, such as ADA. B. Binance and Coinbase. There are other options for staking ADA, which will be discussed later.
After creating an account with a cryptocurrency exchange, users must deposit ADA tokens into their exchange. This can be done by buying Cardano coins directly from the exchange or by transferring existing ADA holdings to their exchange wallet.
Choose the staking option
The next step is to navigate to the Staking page on the exchange platform UI and select Cardano. Most platforms offer the ability to select the staking duration, which determines how long one’s holdings are locked.
After selecting the desired wagering period, users must decide how much ADA they wish to wager. Exchanges usually charge a small fee for staking services, so this needs to be taken into account when deciding how much to stake.
Research staking pools
Once the appropriate staking duration and amount of ADA coins have been selected, it is time to look for staking pools. Exchanges that offer staking services usually list recommended staking pools for users to choose from. Staking pools are usually ranked based on key information such as: B. Total number of blocks produced, overall block creation performance, expected return on investment, and more.
While the most attractive pools tend to be at the top based on these indicators, users can still choose staking pools based on their own criteria. Before choosing a pool to join, it’s important to evaluate factors such as pool size, uptime, liquidity, and past results. Depending on the platform, users can view key details about each staking pool, such as:
- Return on the employed ADA or interest rate
- The cost of joining (split into a tax percentage and a fixed rate)
- The size of the staking pool in terms of how much ADA is in it and how close it is to capacity
- How much money the staking pool operators have delegated to the pool
- The number of blocks minted in the pool’s history.
Some users may also choose to consider off-protocol factors when choosing which staking pools to join, e.g. B. how certain pools match their personal interests. This includes considering whether a pool is run by an NGO or powered by green energy, and the like.
Delegate your ADA tokens
After a suitable staking pool is found, users can delegate their ADA tokens to the chosen pool. To do this, enter your wallet password and click “Delegate”. Once this is complete, the user’s assets have been successfully placed into the pool.
Where can I use my Cardano?
Here’s how to deploy your Cardano crypto asset holdings across different platforms.
How to stake Cardano on Coinbase
Coinbase offers an annual return percentage or APY of 3.75% for Cardano staking. According to the platform, users’ ADA stays in their account at all times and they can opt out at any time. To stake ADA, users must:
- Create an account on Coinbase.
- Select the desired Cardano staking pool and check the corresponding required staking amount.
- Buy Cardano on Coinbase or deposit the tokens from an external wallet into their Coinbase wallet.
- Add their ADA to their selected Cardano staking pool and approve the appropriate fees and minimum retention period.
- After the initial holding period of 20-25 days, wait for your Cardano staking rewards to arrive every five to seven days.
How to use Cardano on Binance?
According to Binance, users can stake Cardano on the exchange and earn up to 6.1% APY. Users can also receive weekly staking rewards and unstake them at any time to access their funds without having to wait for an unstaking period. How to bet on Binance:
- Create an account on Binance.
- Visit the Binance staking home page.
- Make sure you have sufficient funds in your Binance Spot wallet.
- Select ADA from the list of tokens listed on the page.
- Read and follow the on-screen instructions to start staking on the platform. Click next.”
- A “Stake Crypto” pop-up will appear. Enter the desired amount to stake or select the percentage of total assets to stake.
- To reset token rewards automatically, select “Auto Retake”. This will automatically increase your staking rewards. To deposit staking rewards into your wallet, select “Disable Auto-Repeat”.
- Click Deployment Preview. Review the details and click Confirm.
- The user will receive a “Staking Success” confirmation in a pop-up window. When you’re done, click Got it.
How to stake Cardano on eToro
EToro offers its users convenience by automatically staking supported cryptocurrency holdings such as ADA and Ether (ETH) on behalf of users. Therefore, no additional steps are required when staking ADA on eToro. Once a user has created an account and saved ADA to their eToro wallet, they can start receiving staking rewards automatically.
EToro retains a small percentage of the reward or “fee” for all operational and technical costs. The reward percentage of monthly staking income each user can receive depends on their eToro membership status:
- Bronze members and all users in the United States: 75%, with a nine-day holding period.
- Silver, Gold and Platinum Club members: 85%, with a nine-day holding period.
- Diamond and Platinum+ Club members: 90%, with a nine-day holding period.
How to put Cardano on Yoroi
Yoroi offers up to 4.62% APY on Cardano staking. Yoroi is a lightweight no-custodial wallet for Cardano where users can send and receive transactions and stake their holdings to earn returns. To stake Cardano on the platform:
- Download the Yoroi plugin from the Yoroi website.
- Enter payment information to be used when purchasing assets through Yoroi.
- Choose between the platform’s hot wallet or cold wallet options.
- Follow the on-screen recovery setup prompts.
- Buy ADA through Yoroi or transfer existing holdings to your Yoroi wallet.
- Select a Cardano staking pool and delegation icon.
- Add the desired funds to the selected pool and check the corresponding fees.
- Confirm and start earning returns on ADA.
What are the risks of staking Cardano?
Cardano staking is an attractive way to generate passive income, but there are still some risks that users should consider. A potential risk when staking ADA is a high transaction fee. Therefore, it’s important to research each pool’s fees and rewards before committing funds.
Additionally, because staking pools must remain online 24/7, they remain potentially vulnerable to cyberattacks. Users risk losing their money if the pool operator is not security conscious.
Finally, Cardano’s staking rewards are highly dependent on market prices. Therefore, when the price of ADA goes down, users can get lower than expected returns. As with any investment, it is important to research and understand all the risks involved before putting ADA on the Cardano network.
