In this guide, we will teach you how to stake ADA. Staking ADA on Cardano is very easy. The process is non-custodial, and your assets remain in your wallet.
We will cover everything from how to set up a Cardano native wallet to how to make a transaction. Staking ADA is a great way to earn rewards and support the network! Let’s get started.
Why Should You Stake ADA?
There are many reasons why you should stake ADA. For one, staking ADA is a great way to earn rewards. When you stake your ADA, you are essentially “locking up” your coins and helping to support the network.
We use the term “locking up” loosely, as when you’re staking natively in the Cardano ecosystem, it isn’t locked in any smart contracts, and you can freely move your assets in and out of your staked wallet anytime you desire.
In return for your help, the network will reward you with more ADA! Not only that but staking ADA also gives you a say in how the network is run. When you stake your ADA, you are voting for which projects and protocols you want to see on the Cardano network.
Staking ADA on various stake pools in the ecosystem also allows you to tap into Cardano’s popular Initial Stake Pool Offerings (ISPO), similar to airdrops of tokens on other blockchains like Ethereum. Staking to certain stake pools will allow you to access new project tokens and participate in new ecosystems that projects that are just developing.
So, now that we’ve covered some basics let’s get into how to stake ADA!
How Does Staking ADA on an Exchange Compare to Staking to a Native Cardano Stake Pool?
If you’re looking to stake ADA on an exchange, there are a few things to keep in mind. Staking pools on Cardano’s native ecosystem offer more features and benefits than those found on exchanges.
Exchanges typically charge higher fees, have longer withdrawal lockups, and offer less transparency than stake pools. When you stake your ADA on an exchange, you trust the centralized entity to keep your coins safe and secure. You don’t actually own or control your ADA on an exchange. Current situations such as Voyager or Celcius are good examples where custodial services can wipe out the value of your assets when withdrawals are stopped and your assets are seized by the company which you trusted to look after your crypto assets.
Stake pools in the Cardano network are decentralized entities that anyone can run. Stake pool operators must adhere to guidelines in running a stake pool in order to ensure that they are providing a high-quality service, continuously minting blocks and earning rewards.
Additionally, when you stake ADA to a stake pool, you can monitor the progress of your stake and view other important information such as performance statistics, uptime, and more.
When you’re ready to unstake your ADA, you can do so at any time without waiting for a set period or paying any fees. So, now that we’ve covered some basics, let’s get into how to stake ADA!
How to Stake ADA: Overview
There are two ways to stake ADA as delegator to a stake pool. We will cover the main methods in this guide via a native Cardano wallet. You will need to complete the following steps to start staking natively.
- Setup a native Cardano wallet
- Transfer your ADA from an exchange to your newly created wallet
- Find a dedicated stake pool and operator to delegate your wallet & stake ADA
- Delegate your wallet
- Wait for the rewards to start coming in
Setting Up a Native Cardano Wallet to Stake ADA
There are many wallets to choose from in the Cardano ecosystem. Leading companies created a few official wallets in the Cardano blockchain ecosystem early on including a full node wallet called Daedalus from IOHK, a light wallet called Yoroi from Emurgo and another light wallet called NuFi (formerly ADALite) from Vacuum Labs. Other companies and Cardano community members have more recently pushed the boundaries of development and created fantastic wallets bringing even more functionality to users on the blockchain.
Our documentation and tutorials on our website cover the following wallets:
- Daedalus (full node wallet)
- Eternl (Formerly CCVault)
- Card Wallet
- NuFi (formerly ADALite)
- and to come, Lace Wallet
For the sake of simplicity on this overview, we’ll cover the staking process for Daedalus and Yoroi. Our courses on Cardano wallets cover the others in the ecosystem, and we encourage you to review them at your leisure.
The Two Type of Cardano Wallets: Full Node & Light Wallets
There are two types of wallets, full node wallets and light wallets. Full node wallets such as Daedalus download a copy of the blockchain locally to your computer and are great as you will always have a direct connection to the Cardano blockchain but take time to synchronise and require larger computer resources to do so. Daedalus is great when you need direct access to the blockchain and want to bypass shared infrastructure since you are using your own computer. If you’re minting an NFT or trying to get early access to projects, Daedalus has always been the favourite for these situations.
All the other wallets in the Cardano ecosystem are considered to be light wallets. These light wallets rely on cloud servers that can talk to the Cardano blockchain. Both have their pros and cons, which we cover in our wallet courses for Cardano.
Transfer ADA from an Exchange to Your New Cardano Wallet to Stake ADA
The next step is to transfer your ADA from an exchange or another wallet into your new Cardano wallet. When you want to move your ADA around, you need to use an “address.” Your address is like your bank account number; you will need it to send or receive any ADA or other token in a transaction.
To find your address in Daedalus, click the “Receive” tab and copy your address. In Yoroi, you can find your address by clicking the “Addresses” tab and selecting the wallet you want to use.
Wallets on the Cardano blockchain are a multi-address system. This means your address may change each time you look for your address. Your previous addresses that have been used can be reused and will always be assigned to your wallet.
You will then need to log into your exchange account or another wallet holding your ADA and send it to your new address. The process for sending ADA from an exchange will differ for each one, so we recommend you follow their specific instructions or reach out to their customer support if you have any questions.
How to Find a Cardano Stake Pool and Stake Pool Operator to Delegate & Stake ADA
The next step is to find a stake pool and operator that you want to delegate your wallet to in order to stake ADA. When looking for a stake pool, there are a few things you should consider:
How much the pool costs in terms of fees. There are two fees, one being the fixed fee and the other bing the variable margin fee (usually around 0.5-5% but can be lower). The fixed fee is currently set to 340 ADA which is set by the protocol. The variable fee will differ from stake pool to stake pool set by the owner of the pool.
It is important to note that you do not pay this fee when you stake ADA to the pool. These fees are taken collectively from the total rewards that the stake pool generates when minting blocks on the blockchain and the fee is shared amongst all the delegates to the pool.
Another factor to look at when choosing a pool is how many other people are delegating to the pool. The more people that are delegating to a stake pool can indicate how popular it is. More delegates will also reduce the possible large movements of ADA in and out of the pool.
Other factors that should be taken into account include:
- The performance of the pool
- The philosophy or mission of the stake pool operator
- The technical setup of the pool (this is important for security and stability purposes)
A great place to start your research is our list of stake pools.
Once you have selected a pool, you will need to find your stake pools TICKER or Pool ID. This is a unique identifier for each stake pool and is used to indicate which pool you want to delegate your wallet too. The stake pool ID usually looks something like this: “6658713e2cbfa4e347691a0435953f5acbe9f03d330e94caa3a0cfb4”. Or own stake pool’s ticker is ADAOZ and is usually used over the Pool ID as it is much easier to remember.
To find the stake pool in Daedalus, simply click on the “Delegate” tab and search for the name or ticker of the stake pool you want to delegate to. In Yoroi, you can find the stake pool by clicking on the “Stake Pools” tab and searching for the ticker and select the pool you want to delegate to.
You are ready to delegate now that you have the stake pool ID or ticker!
How to Delegate Your Cardano Wallet and Stake Your ADA
Delegating your wallet is a way of indicating to the Cardano blockchain that you want to be considered as a validator. When you delegate your wallet, you are essentially pointing and allocating your ADA wallet balance to a stake pool operator who will use that delegation it to help run their pool and validate blocks on the Cardano blockchain.
In return for delegating your stake ADA, you will receive rewards in the form of more ADA. The amount of rewards you earn will depend on a number of factors, including the size of your delegation (amount of ADA), the performance of the stake pool, and luck.
To delegate your wallet in Daedalus, simply click on the “Delegate” tab and enter the stake pool TICKER you want to delegate and stake ADA to.
In Yoroi, you can delegate your wallet by clicking on the “Delegate” tab, selecting the wallet you want to delegate from, and entering the stake pool ticker and click delegate.
In all wallets you will have to sign a transactional pay a fee to delegate your wallet. If it is your first time delegating your wallet, you will also have to pay a 2 ADA wallet registration fee.
Once you have delegated your wallet, your rewards will start rolling in! Depending on the size of your delegation and the performance of the stake pool, you can expect to earn around 3.8-4.5% per year.
And that’s it! You are now a Cardano staker and you’ve successfully gone through the process to stake ADA! Congratulations on taking this important step in supporting the Cardano network and earning rewards for doing so
When to Expect Cardano Rewards from Staking
Cardano rewards are paid out approximately every five days, called an epoch. However, the exact schedule can vary depending on several factors, including the size of your delegation and the performance of the stake pool.
To check on the status of your rewards, you can use a tool like Yoroi or Daedalus. Simply click on the “Rewards” tab to see how much you have earned and when your next payout is scheduled.
If you’re delegated to a stake pool that is minting blocks every epoch, you should expect to see your first rewards from that stake pool approximately 15-20 days after your delegation. This is the slight delegation delay seen when you first delegate to a stake pool. This is a simple summary to help illustrate the delegation cycle group in 5
- Epoch 1, delegation is registered
- Epoch 2, delegation becomes active but doesn’t receive rewards yet
- Epoch 3, delegation is now live, and if you’re stake pool mints a block, you will get regards
- Epoch 4, rewards for your delegation in the previous epoch are calculated
- Epoch 5, rewards from epoch three are distributed to your wallet
Keep in mind that the cycle loops on itself, starting again every epoch, and the blockchain protocol constantly records and measures your live stake to the pool every epoch for inclusion in the blocks and rewards calculations and distributions. Steps 1 and 2 are the two steps that are not repeated once you have successfully delegated.
If you’d like to learn more about the time frame for delegation rewards to appear in your wallet, please check out our blog post and audio podcast about delegation rewards.
Staking ADA is a great way to support the Cardano network and earn rewards. You can help validate blocks on the Cardano blockchain and earn rewards by delegating your wallet to a stake pool.
Now that your wallet is delegated to a stake pool, you can also register it for voting in Project Catalyst and help direct the future of the Cardano blockchain. We have some material on that that you might want to check out.
If you need help with staking your wallet, please reach out, leave a comment below, and the community will be more than happy to help you with your delegation and Cardano journey.