What is Staking in Cardano Network ?

One of the unique features of some digital currency blockchains is a process called Stake. Staking is similar to mining digital currencies as it helps validate transactions. For Cardano investors, staking is an easy way to earn passive income while supporting the stability of their beloved currency card network, Cardano .

Digital currencies, such as Bitcoin, operate on a Proof of Work (PoW) model to verify transactions. The PoW model involves the use of powerful computers that solve complex mathematical equations to validate transactions. These miners compete with each other to solve equations and in this way consume a lot of electricity in this process.

PoS (Proof of Stake) is a popular alternative form of mining used by the Cardano network. In the proof-of-stake model verification process, an algorithm selects which node adds the next block to the block to meet the number of coins required for the stake. Nodes often consist of groups of people who have combined their shares in a pool.

Investors increase the pool’s chances of generating blocks by transferring Cardano’s cryptocurrency to a stake. When blocks are generated, pools receive bonuses that are paid to all pool participants.

From a practical point of view, the average Cardano investor only needs to know that the ADA used to stake will never leave the investor’s wallet, and investors will receive a reward similar to the profit in the savings account. Investors are free to move their payday tokens after staking, or cancel the process altogether if desired.

Cryptocurrency exchanges such as Binance, Bitfinex, Coinbase, KuCoin, Kraken and Poloniex all offer one-click Cardano stake.

Reasons why Cardano staking is important

If you have ADA tokens in your wallet and you want to make money while you sleep, you will probably prefer to join stake pools instead of letting ADA coins get in your wallet. By doing this, you will help a lot in the expansion and development of the pool that you will join, and this will make the pool more prosperous. As a result, you will be paid more profit.

In addition, the operators of the pools where Cardano is located, i.e. people like you, receive ADA tokens as a reward for their efforts. Naturally, if it were not for these awards, pool operators and digital currencies in general would have refused to do so due to lack of motivation and hard work. As a result, Cardano’s blockchain network gradually weakened and lost its security. So, anyone who follows Cardano’s staking path in a series of ways will be able to receive a prize, a token.

Pros of carding staking

Depending on how Cardano shares and stakes, you can earn more than 9.1 percent to even more than 7 percent. Also, mining digital currencies can be a very complex, costly and time consuming process. However, staking is an alternative way for cryptocurrency investors to make money in a hassle-free process. In addition, stacking is an alternative consensus mechanism, a way to verify and secure transactions that allows users to generally secure crypto networks with minimal power consumption and setup. In this way, each wallet is like a different bank account that makes a profit and supports the network. Aside from that, the Cardano ecosystem benefits from a highly professional development team that is developing rapidly.

Disadvantages of carding staking

Investors who have opened an account on Cardano to make a profit may not be concerned about the risks involved. However, you either should note that adherence to ADA, directly or indirectly, will not be dangerous. The only threat around this is the loss of the wallet private key. If this risk exists for all digital currencies. Do not worry too much and enter the process of staking digital currency with thought and of course calculated.

When to expect the first prize from staking?

Each epoch has a number. At the time of writing, the course with number 240 is in progress. During this period, you can buy or sell your ADA coins. You can also transfer coins to one pool or change the board to another. At the end of the 240 period, a new snapshot will be taken. As you would expect, snapshots are not used in the next 241 period, but in the 242 period. That is, after 5 days of snapshots. There is a periodic delay between the snapshot and the use of the snapshot. Bonuses are calculated after using the stake. In our case, the calculation of bonuses takes place in period 243. The Cardano protocol distributes the reward at the beginning of the next post-calculation period. This happens in period 244.

Basically, you can expect a reward after 3 full periods. Do not forget to wait for the next snapshot. If the user represents in period 240, the reward will be paid in period 244. In this case, there are 3 periods 241, 242 and 243. This means that you have to wait at least 15 days for the first reward, but it can be up to 20 days. Once you receive the first prize, you will receive another prize every 5 days. The cycle is repeated over and over again. With each snapshot, your coins will be reused in the next round.

Do not try staking with exchanges

You may think that betting is very difficult and you can bet with an exchange. Not a smart idea. Each shareholder must keep ADA coins in their wallet. If you have coins in your wallet, you do not risk losing your coins if the exchange is hacked. In addition, if there are more small creatures, decentralization is better than large whales with large penetration. Exchanges usually force you to lock ADA coins for a period. There is no such limit when you bet on your wallet and you can always spend your coins. Think again. Can an exchange give you a higher reward than what you get out of your wallet? This means that the exchange does this free or subsidizes services. Why should the stock market do this? The best conditions for ADA coins are when you bet from your wallet.

 

 

How to stake Cardano in Daedalus wallet

Staking Cardano by doing the following steps on Cardano’s main wallet, Daedalus:

1. Go to daedaluswallet.io and click on the download icon and download the related option based on your operating system.
2. Then go to the program installation page, so we can review all the items before installation and this will take a few moments. Then you just have to wait for the installation.
3. Now everything is ready to create a new wallet. Then click on the Create option and enter your wallet name and password.
4. At this stage, like all wallets, we reach the recovery stage. So write down the available phrases and put them in a safe place out of reach of people.
5. Click the Confirm button and then the Continue button. Now enter the phrases of the previous step in the exact same order and do not forget that the way to recover your wallet are these words and they should not be stolen or lost.
6. Now to confirm the information and rules of the wallet check both boxes and click on Confirm. This synchronizes the wallet’s transaction history with the Chinese blockchain, which is usually not the first time you have seen a record.
7. At this stage, it is time to update the wallet, which takes a while.

Well, now it is time to start sticking the cryptocurrency tokens, or Cardano cryptocurrency, on the left.

8. Here you have to click on the Staking Pools. Of course, all the available pools can be seen, and the yellow color shows that it is a saturated pool.

 

 

If they are about 100% full, in theory, you can still work in a saturated pool, but you will definitely get less reward, so it does not make sense. It is recommended to go to one of the unsaturated pools.

It can be seen that some pools still have empty space, so if we click on it, its saturation percentage can be seen. After finding a relatively secluded pool, all you have to do is click on delegate to this pool and then click Continue.

Choices are easy if you have one wallet, but if you have multiple wallets, you should definitely choose one.

There is currently a charge for small delegations because there is a need to send a transaction to the system, which is always costly. This cost is so that people cannot spam the system with unwanted transactions and incur costs for operators, without incurring a cost themselves.

9. What happens here is that once every 5 days before the reward is paid, the system records all the assets involved and uses it to calculate the reward, after which the period proceeds to the payment.

 

In Conclusion

In a world of hard-earned peripherals, sticking to digital currencies is an easy way to be guaranteed returns. However, like dividends, the underlying value of an asset is an important consideration. Like most digital currencies, Ada prices are volatile and unpredictable. For investors who have already held the currency code for a long time (hold the term), Cardano steak is a simple way to increase returns. Therefore, if the price of Cardano goes down or the digital currency market plummets like it did in 2018, the potential losses from investing in cryptocurrencies could quickly outweigh the return on investment.