Founded in 2015 by Ethereum co-founder Charles Hoskinson, Cardano is a proof-of-stake (PoS) blockchain that is often referred to as the “Ethereum killer,” owing to its superior technology and high level of security and sustainability.
Much like 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 frequently operated by those with technical experience and the appropriate hardware for effectively staking on the Cardano network, although anyone can become their own staking pool operator. Users also have complete autonomy to decide which pool they’d prefer to join and can assess each based on pool size, uptime and past performance.
Cardano divides periods of time into epochs, a measure of time used to specify when events in the network are set to occur, such as incentive distribution or validator transaction assignments.
On Cardano, each epoch consists of 432,000 slots, smaller units of time further divided into one-second intervals. One Cardano epoch lasts approximately five days. After each epoch concludes, a snapshot records the distribution of staked ADA tokens. This is used to calculate the rewards each staker will receive.
Users who wish to participate in staking will enter a pool through delegating, which allows coins to be unstaked and restaked multiple times with various pools, provided that user wait for the current epoch to pass before relocating their assets.
Steps to stake Cardano (ADA)
Below is a step-by-step guide on how to stake Cardano:
Find a reputable cryptocurrency exchange
The first step is to find a cryptocurrency exchange that supports ADA trading and staking, such as Binance and Coinbase. There are other options for staking ADA, which will be discussed in greater detail later on.
After creating an account with a cryptocurrency exchange, users must deposit ADA tokens in their exchange wallet. This can be done by buying Cardano coins directly from the exchange or transferring existing ADA…