When the Internet was in its nascent stage, many investors doubted that this technology would ever be profitable. Fast-forward to today's reality, many investors are in a similar position, but this time missing out on blockchain & cryptocurrencies.
This budding industry has a promising future and holds great earning opportunities. One such is staking Cardano, among the most popular cryptocurrencies nowadays. This article will provide an extensive guide on how to stake ADA.
Namely, you will get an explanation of staking Cardano and its requirements and a list of platforms where to stake ADA. Moreover, with a detailed overview, you will find your best Cardano wallet for staking ADA. So without further ado, let's dive in and learn how to accrue coins with high value potential.
What is Cardano ADAStaking?
To understand how to stake Cardano, you need to know what staking is. It stems from a consensus mechanism – a process of validating transactions in a blockchain – called Proof-of-Stake (PoS). Cardano is a blockchain built with PoS.
In order to function properly, every PoS blockchain relies on validators – network participants that lock a certain stake of native tokens within the network. By staking their tokens, validators keep the network decentralized and secure. In exchange for this commitment, they earn tokens as a reward.
Becoming a validator requires holding a sufficient amount of tokens and operating a node, which is a device used to run validator software. The good news is that you don’t have to be a validator if you want to participate in ADA staking. A simple workaround is to delegate your ADA to a trustworthy validator and receive a percentage of the rewards they earn.
What is Cardano ADA?
Created in 2017 by Jeremy Wood and Charles Hoskinson, Cardano website is a blockchain platform that uses a Proof-of-Stake consensus mechanism. Its native token is called ADA.
As one of the first successfully launched PoS blockchains, Cardano stands out from the crowd of similar projects. As the main component of its uniqueness is Ouroboros — Cardano's proprietary proof-of-stake protocol, which is also the first ever protocol based on peer-reviewed research.
Input Output (IOHK), the company behind Cardano, submitted Ouroboros research papers to various experts to get feedback. After receiving academic validation, these scientific papers were published and presented in top-tier cybersecurity and cryptography conferences. Thanks to Ouroboros, Cardano takes pride in being a highly secure, sustainable, and scalable chain.
Note. Cardano takes its name after an Italian 16th-century mathematician, Gerolamo Cardano. And its token ADA was named after a British mathematician Ada Lovelace, who is often called the first computer programmer.
Read more about What Cardano is and How it Works.
How does Cardano ADA Delegation Work?
Those who want to know how to stake ADA without running a node, need to know how staking pools, delegation, and delegator choice on Cardano work.
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Staking pools. ADA holders are responsible for staking to entities called staking pools operators (SPOs). These individuals have enough expertise and efficient hardware equipment to perform such a complex task.
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Delegation. Accordingly, ADA token holders join staking pools of other enthusiasts who want to stake Cardano. Together, they put their assets into the “wallet” of the pool operator. This process of handing over the tokens is called delegation, and the entity to which the tokens are delegated to a validator.
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Delegator choice. Anyone who wants to stake ADA is free to choose any validator. However, it's essential to make a thought-through decision, as the productivity of your investment depends on the staking pool and its operator. Pay attention to the pool reviews from other users, its previous performance, uptime, and size.
How to Stake Cardano ADA
Now that you know what Cardano and its network structure are, it's time to learn how to stake it to receive rewards.
To begin staking Cardano you first need to have a wallet where the tokens are stored. For this, check if your current wallet has ADA in the list of its currencies. If you don't have one yet, select a wallet that will fit your currency and security requirements. Don’t worry if you have no such wallet in mind – we’ll guide you through the most popular wallets for staking Cardano later in this article.
Once you're ready with your wallet, deposit ADA tokens on it. There are two ways to do that. First, you can purchase them in the wallet app by paying with your bank card. Alternatively, you can exchange your other currency tokens for ADA if the wallet of your choice has an inbuilt exchange option.
Great, now the ADA tokens are in your wallet. This means you can start staking right away.
Step-by-Step Guide to Stake Cardano ADA
The process of staking Cardano is quite simple and can go smoothly even if it's your first time staking. It takes four steps, which we'll get into below.
Step 1. Choose a wallet
You can stake ADA either through a wallet or via an exchange. The first option is more popular as it gives you full custody over your keys unlike exchanges. Thus, you're getting increased security of your assets. In order to demonstrate the steps involved in staking ADA with a wallet we are using the Yoroi wallet as an example. Below you’ll also find a list of other wallets which support ADA staking.
Step 2. Select a staking pool
As mentioned above, to stake ADA you need to delegate your tokens to a staking pool operated by a validator. This means that the success of your staking depends on how efficiently the validator works. Therefore, go to the “Delegation List” on your Yoroi dashboard and take your time to research the available staking pool options.
Among all validators, Everstake is one of those few who offer attractive yields and maintain a high degree of security & transparency through qualified staff and enterprise-level hardware. If you don’t want to spend a ton of time on picking and choosing, you won’t go wrong with delegating Cardano to Everstake.
However, if you’re willing to do your own validator research, pay attention to such metrics:
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ROA — check the pools APY, i.e., interest rate
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Costs — what are the fees are which you and the pool would have to pay
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Pool size — the amount of ADA already in the pool
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Pool saturation — how much of the pool's capacity is already taken
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Pledge — how much of their assets the pool owners are staking there
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Blocks in epoch — how many blocks the pool minted in one epoch (5 days)
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Lifetime luck — the ratio of how many blocks the pool produces compared to how many it was supposed to.
Step 3. Delegate
Once you've found the staking pool operator that fits your needs, select it and click "Delegate". After you click it, your funds will be staked in the pool. Moreover, keep in mind that at this step, fees will also be taken from your account. Accordingly, you need to consider this when entering the amount of ADA for staking.
Step 4. Get rewards
That's it; now you need to wait some time to get APY. The Cardano network distributes rewards after each epoch; one epoch being estimated to take five days. However, to receive your rewards, you need to wait for three epochs to pass, which is about fifteen to twenty days.
Pros and Cons of Cardano ADA Staking
So, staking Cardano turns out to be relatively easy, doesn't it? But that's not the only criterion one looks for when choosing passive income opportunities on. For this reason, below you'll find a list of advantages and possible drawbacks of staking Cardano to make your choice easier.
Pros of Cardano ADA Staking
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Great APY. The average yield offered by Cardano staking platforms varies from 4% to 8%. From the investment point of view, it is a safe choice that will steadily bring you passive income without much effort.
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Easy process. As you saw above, staking Cardano takes only a few steps that any newbie can complete.
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Low threshold. Most Cardano staking platforms don't have a minimum number of tokens required to join a pool. This means that you can firstly check the trustworthiness of the network by staking some ADA and invest more if it suits your needs.
Cons of Cardano ADA Staking
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Pool corruption. As it turns out, untrustworthy staking pool owners might take a bigger share of the rewards than they claim to. There's almost no way of knowing if the one you're choosing isn't corrupt. However, you can do thorough research and check other participants' reviews to ensure safety.
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ADA volatility. As any currency, Cardano is exposed to deflation. It's been showing unpredictable changes in price with the recent trend of continuous falling. However, its unpredictability can cause it to go upwards just as much as downwards.
Where to Stake Cardano ADA?
The two main ways of staking Cardano is through wallets and exchanges. However, staking ADA through wallets is considered more secure as your funds remain in your full custody. Below you'll find a detailed overview of wallets where to stake Cardano.
Wallets to Stake Cardano ADA
Unlike on cryptocurrency exchanges, staking Cardano with a crypto wallet offers a higher level of security. Thus, the private keys you use to log into your wallet aren't stored on the third-party server (exchange). Preferably, you get full ownership and confidentiality so that you, and only you, have access to your assets.
Daedalus Wallet for Cardano ADA Staking
This advanced wallet supports only a desktop version for Linux, Windows, and macOS. With Daedalus you can either delegate your ADA tokens or run an independent Cardano node. Daedalus is highly secure as it uses a seed to generate keys for each transaction. Moreover, it has passwords, backup, and recovery seeds. You can find a detailed guide on how to stake ADA with Daedalus here.
On the contrary, the wallet supports only Cardano coins, so it would best suit ADA enthusiasts looking for a way to secure the network. For staking beginners and traders of various tokens, it's not the best choice.
Eternl Wallet for Cardano ADA Staking
Eternl is a Cardano light wallet that offers many essential features users require to interact with the Cardano network. It features browser extensions for Chrome, Edge, Brave, and Opera as well as an iOS and Android mobile app.
The annual staking yield offered by Eternl is about 5%. As with other platforms you can expect the rewards to come in roughly 20 days. Check out a detailed instruction on how to stake ADA with Eternl here.
AdaLite Wallet for Cardano ADA Staking
AdaLite is a web wallet that supports 1000+ cryptocurrencies, including Cardano, Solana, Flow etc. It also works with the major wallets such as Trezor T, Ledger Nano S, Ledger Nano S Plus and Ledger Nano X.
On AdaLite you can send, receive and stake ADA, with 3% rewards for staking Cardano. Moreover, you can use the wallet for trading and managing NFT. It's protected with mnemonic seeding and supports multiple hardware wallets that add to its security. If you’re eager to get started, make sure to read our step-by-step guide on how to stake ADA with AdaLite.
Yoroi Wallet for Cardano ADA Staking
Yorkie is the simplest Cardano wallet for staking ADA, which is why it would suit a beginner. It comes with a mobile version with an intuitive interface. You can use it to send, receive and delegate your ADA tokens to a staking pool.
Yoroi offers ADA APY of 4.84% to 5.12%, with rewards paying out every 5 days. It also has a browser version with the full functionality of a mobile one. However, it doesn't support an option of trading or buying tokens with fiat. Moreover, it only operates staking, so you can't use it to run your node. Read more about how to stake ADA with Yoroi in our related articles:
Exodus Wallet for Cardano ADA Staking
Exodus is a Cardano wallet for staking ADA and 225+ other cryptocurrencies. It comes with a mobile version and a browser extension.
With Exodus, you stake your ADA address rather than tokens. This implies that you must wager your entire balance and cannot choose a certain amount to bet in the pool. The advantage of this is that because your ADA tokens are not locked in during staking, you may still utilize them for routine transactions.
Exodus has a minimum amount of 5 ADA for staking. However, it offers a 4.91% APY. For step-by-step instructions on how to stake ADA with Exodus, take a look at our detailed guides:
Why Stake Cardano ADA with Everstake?
You need a trusted provider to ensure your assets' safety in return for a reasonable reward. If that's the description of your requirements, consider Everstake as your validator.
Entrusted by 625,000+ users, Everstake operates on 70+ blockchain networks. By staking Cardano with Everstake, you can get 4.91% yield with a 3% transactional fee. The safety of your funds is secured by bare metal servers that are distributed around the globe. The Everstake network has backup nodes for emergencies and dedicated DevOps who monitor it 24/7.
To start staking ADA with Everstake, select it from the list of validators on the staking platform of your choice. Alternatively, you can enter the address in the search bar: e4abcf4408584601e7c707a8902996c0c291e1a3c8300b327ae3f6ab.
If you have any questions about the conditions and security measures of Everstake, schedule a call to discuss them with our manager.
Cardano ADA Staking FAQs
1. What’s the Best Place to Stake Cardano ADA?
For staking Cardano, you can choose between wallets and exchanges. There are plenty of options, each of them having its benefits. However, you should choose one that ticks all (or most) of your boxes in the requirements. A platform of your choice should be safe, easy to use, versatile and profitable.
Moreover, pay close attention to selecting a trustworthy staking providers such as Everstake. The combination of transparency, competency, and trust from other users indicates a good choice.
2. How Much Cardano ADA Do You Need for Staking?
The amount differs depending on the platform you choose for staking Cardano. However, usually, there is a minimum threshold of 1 ADA set on some platforms, rising to 65 ADA required to start staking. As to the maximum amount, some platforms limit it to 100,000 tokens while others to 500,000 ADA.
Besides, you must remember that some wallets use your whole amount of tokens stored. So if you want to stake only part of your assets, try using separate wallets for staking and other transactions.
3. Is Staking Crypto Safe?
Staking is pretty safe. This is because your assets never leave your wallet; you never give them to a validator. However, when you delegate your tokens, they are locked in your wallet with no way of using them until the locking period is over.
At the same time, the risk of staking comes from the platforms themselves. If you're using a crypto exchange, your account data is stored on its servers. In case of a leak or hacking, your account could be drained. Moreover, even when you store funds in a hard wallet, you must be careful not to expose your keys to anyone.
4. Can I Stake Cardano ADA with Everstake?
Yes, as a staking provider, Everstake operates 40+ types of coins, with ADA being one of them. You can stake Cardano and get a 4.91% reward by joining Everstake. Your assets are safe with the provider's server protection policy, and rewards are guaranteed due to the transparent operation. Wait no longer – stake ADA with Everstake and start accruing rewards today.
