How do I stake Cardano?

Cardano ADA will begin its fully decentralized operation later in 2018 when the Shelley update is released. Once the Cardano blockchain goes distributed, it’ll allow users to participate in staking pools and earn proportional slot rewards (Cardano works in slots, not blocks).

Our calculations of potential staking rewards aren’t very optimistic but as some have pointed out in feedback received about that article the calculations were performed using data from January 2018 and the formulas in the Cardano source code have been changing since then. Users are carefully optimistic that payouts will be higher than we estimated 5 months ago (this article published in mid 2018).

Staking will involve handing someone a cryptographic “letter of attorney” called a staking key (or third party signing key, aka proxy key or PSK). If you wish to stake 5000 ADAs you will give a mining pool the authorization to sign 5000 ADA on your behalf. You’ve then staked these coins and, since the signing rights have been transferred to someone else, you cannot spend them for as long as the third party holds the signing key.

All this will be done inside Daedalus Wallet. Pools will show up in Daedalus and this signature outsourcing procedure also will be available from the same interface. Sample screens can be seen on the Cardano Roadmap website as pictured below:

The really cool thing about Cardano staking is that you will hand out a signing key but not your actual ADA coins. Every coin remains under your control no matter what. Pools will only act on your behalf during the staking lottery, when a slot leader will be chosen to solve the next block. Cardano blocks are very frequent and users have the chance to become a slot leader approximately once every 20 seconds.

These are some of the basic concepts of Cardano staking. Everything will become clearer once the right options show up under Daedalus’ interface. We hope this brief intro has cleared up some of your questions regarding Cardano staking.

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Published by Crypto Bill - Bill is a writer, geek, crypto-curious polyheurist, a dog's best friend and coffee addict. Information security expert, encryption software with interests in P2P networking, decentralized applications (dApps), smart contracts and crypto based payment solutions. Learn More About Us