Delegating Your ADA to Stake Pool Operators
What is staking?
ADA held on the Cardano network represents a stake in the network, with the size of the stake being proportional to the amount of ADA held. The ability to delegate a stake is fundamental to how Cardano works.
ADA holders earn rewards by delegating their stake to a stake pool or pools. Stake pools then represent all ADA holders who have delegated ADA to them. Stake pools with larger ADA holdings get assigned randomly but proportionally large number of transactions to process and confirm on behalf of the network. Similarly, stake pools with smaller ADA holdings will be randomly but proportionally smaller number of transactions to process and confirm on behalf of the network.
Rewards are generated and paid out for every Epoch. One Epoch is five days long. Rewards earned by each stake pool are automatically shared amongst all ADA holder who delegated their stake to a particular stake pool. Rewards are distributed proportional to each ADA holder’s staked amount vesus thr total ADA staked in each EPoch, after deducting fees (both fixed and variable). WAAC Pool charges a fixed fee of 340 ADA per Epoch and a variable fee of 3% of the total ADA rewards allotted per Epoch.
The timing with which ADA holders stake their ADA will determine when rewards associated with that particular stake is paid out. A diagram below shows the timing in more details.
For example, say you stake your ADA with a particular stake pool during Epoch 0 (which was the period between 29 July and 3 August 2020), your stake does not become active immediately. You can follow the blue arrows to understand the different stages that your stake will undergo.
A Stake Snapshot will be taken at the start of the next Epoch, which is Epoch 1, for the network to establish the stake allocation of all ADA stakes with all stake pools.
Stake Delegation becomes active at the start of Epoch 2 using the Stake Snapshot taken prior at the start of Epoch 1, and pools are assigned randomly but in proportion to the amount of ADA staked, the number of transactions to process and confirm on behalf of the network.
Rewards are calculated during the start of the next Epoch, which is Epoch 3, and then paid out in Epoch 4.
It takes a total of at least 15 days, or 3 Epochs, from the time you stake your ADA with a particular stake pool, till the time rewards are automatically paid out to you.
ADA holders benefit most when their ADA is staked with a high performing stake pool operator/s. High performing stake pool operators, regardless of whether they have a larger or smaller ADA holdings at each EPoch, is someone who is able to processes a high percentage of transactions assigned by the network to them consistently over time. The reward mechanism of Cardano network is designed this way so that it can eventually become a highly decentralised, high performance network that reward high performing stake pools.
It is not true that a larger stake pool operators will earn more rewards for ADA holders. Conversely, it is also not true that a small stake pool will earn less reward. Stake pools large and small will earn rewards for those who delegated to them commensurate with their own pool’s individual performance.
WAAC Pool is committed to operating at a very high standard pool to win maximum rewards for ADA holders who decides to delegate with us.
You can try the Cardano staking calculator.
Read also: How to choose a great stake pool – complete guide.
Is there any risk when staking ADA?
When you stake your ADA , your ADA never leaves your wallet. Your ADA will also not be locked at any point in time, which means you are free to move your ADA, either a portion or all, at any time even after you have decided to stake them. Stake pools cannot spend your ADA.
How to stake ADA - Step by Step
In this step-by-step guide, we will show you how to delegate ADA using Daedalus Mainnet Wallet.
Let’s get started!
1. Intall Daedalus Mainnet Wallet
Go to daedaluswallet.io/en/download to download and install the latest version of Daedalus Mainnet wallet.
Choose your operating system to get the latest version of the wallet.
2. Create or restore a Cardano wallet
Open Daedalus wallet, accept the default settings: Click “Continue”.
Review and accept the Terms of Service Agreement: Click “Continue”.
Once you install the Daedalus Wallet, open it and allow the blockchain to sync up. It could take up to an hour. Then if you don’t already have a wallet created, you need to create a new wallet. If you already have a wallet, you can restore it with the restore feature and your recovery phrase.
3. Move ADA from exchange to Daedalus wallet
If your wallet in Daedalus is empty, you can buy ADA from an exchange like Binance, Kraken, Crypto.com, Upbit, HitBTC, Huobi Global or others. Move your ADA from the exchange to your Daedalus wallet.
Once you move them you are ready to stake.
4. Choose a stake pool
Click on the second icon from the top in the main navigation to access delegate features: Choose “Delegate center”.
Then from the horizontal menu select “Stake pools”.
You can use the search field to find your desired pool (in this example, we use WAAC).
5. Delegate stake to receive awards
After you have chosen a stake pool listed under the “Stake pools” tab, you can then start to delegate your ADA. In this example, we use our stake pool WAAC. Click on the WAAC pool and when the popup shows, just click on the “Delegate to this pool” button. Once you do that, you will have to verify this action with your password.
That’s it, your ADA has been staked with WAAC.
