Catégories
Cardano Delegators Pool

How to delegate to a pool on Cardano ?

So you just bought some ADA and you have heard about staking. I am going to explain everything you need to know about Cardano and its Delegation Mechanism.

What is staking ?

Staking is the action of securing the Cardano blockchain using your ADA. You do so by delegating your ADA to a stake pool which is a sort of group of people who get together to form a coalition of delegators.

Is it risky ?

Absolutely not! There is literally zero risks to staking your ada on the Cardano blockchain. When you delegate your ADA to a pool they never actually leave your wallet. You are only providing your staking rights to a stake pool. Think of it like you are giving a proxy to a stake pool to vote in your name.

Are my ADA blocked while I stake ?

Nope never! Remember I said above that you are only giving a proxy right to the stake pool? That is exactly that. You can do transactions with your ada to send or receive just as you could have done before. When you do so, your delegation to the stake pool will automatically go up or down without any intervention.

How can I stake ?

The first thing to do is to transfer your ADA in your own custody. If you bought some ADA on a centralised exchange such as Kraken, Binance or Coinbase, you are currently not the owner of the ADA.
You need to create yourself a wallet that you and only you have control over.

Don’t worry I am gonna explain how to create a wallet and delegate your ada below.

How much will I earn ?

We have already covered this question on this article

Let’s create a Cardano wallet

There are two main wallets that you can choose from. Look at the table below to know the pros and cons of each.

NameDaedalusYoroi
Downloadhttps://daedaluswallet.iohttps://yoroi-wallet.com
PlatformWindows, Mac, LinuxChrome, iOS, Android
CostFreeFree
Ease of useMediumEasy
Time to setup5m + 1h of wait time5 minutes
Hardware Wallets compatibleyesyes

Follow the instructions of your chosen wallet to create a Cardano wallet, then come back here for the delegation steps.

Ready to delegate

Using Yoroi

Using Daedalus

Catégories
Delegators Pool

How much rewards will I get?

The rewards you collect are based on two variables which are the amount of ADA you delegate to the pool and the amount of block the pool mints.

Every pool competes with other pools in order to be selected to mint a block. The more ada delegated to the pool, the greater the chances of being selected to mint a block.

Whenever a block is minted by a pool, the rewards are distributed automatically and proportionally to the contribution of each delegators to the pool.

Let’s take an example with the following assumptions

  • A pool has 100,000 ADA delegated.
  • You personally have 10,000 ADA delegated to that pool.
  • The pool mints a block in the epoch, which is worth approximately 1000 ADA

    10,000/100,000 => 10%
    1000 ADA * 10% => 100 ADA
    You would personally get 100 ADA for that epoch.

If the pool is small does that mean my rewards are lower ?

Absolutely not, this is the biggest misconception of the ways the protocol works. Every single pool gets the same rewards overtime. A pool with lots of delegation is selected very often to mint a block. However, it often hosts a lot more delegators which have to distribute themselves the rewards proportionally.

On the other hand a small pool with very few ada delegated might have to wait weeks, sometimes months before it gets selected to mint a block. However when it does, the ADA it collects are very important proportionally to the amounts that are delegated.

Overtime with the current parameters of the protocol, every pool gets a 5-7% reward per year.

What is the reason to delegate to a bigger pool?

Frequency of payment. If you are worried to wait for your pool to be selected, delegating to a bigger pool will increase the frequency of your payments. However, bear in mind it will not increase your overall amount of rewards.

Catégories
Delegators

When will I receive rewards?

You just delegated to a pool (hopefully this one) and your are excited to get your first rewards ?! There are a few steps before you are able to collect your first ada.

  1. Delegation: You have just delegated your ada. It will take two epochs before your stack is accounted by the protocol of the Cardano blockchain. An epoch lasts for 5 days, so multiplied by 2 that is 10 days in total.
  2. Wait for blocks: Not all the pools receive an allocation to mint a block every epoch. If the pool you delegate to is too small, it might take a while before it is able to mint a block. Don’t panic and be patient, all the pools eventually mint a block. If your pool is big enough it will receive an allocation every epoch (5 days)
  3. Mint a block: Your pool just minted a block congrats! It is time to celebrate and prepare for the future rewards. Once a block has been minted it takes 2 epochs (10 days) before the rewards are distributed to you
  4. Collect your rewards: The wait is now over, head up to your favorite wallet and follow the instructions to collect your rewards

Let’s summarize the few steps in days term:

Delegation 10 days + Wait for a block 5 days minimum + Mint a block + Collect rewards 10 days = 25 days