Stake Pool Delegation (2024)

FAQs

How to delegate to a stake pool Cardano? ›

To delegate your funds, just open your wallet and search for the “Staking” or “Delegation” section, where you'll be able to search and find all the Cardano stake pools available. You'll then be able to choose the one you want to delegate your funds to, according to its performance and fees.

A delegation pool abstracts the stake owner to an entity capable of collecting stake from delegators and adding it on their behalf to the native stake pool attached to the validator. This allows multiple entities to form a stake pool that achieves the minimum requirements for the validator to join the validator set.

Also, note that the minimum fixed ADA staking fee across each Cardano Stake Pool is 340 ADA which will be shared among the delegators of the pool. This means by choosing a pool with a higher stake, your slice of 340 ADA fees will go lower. This fee level is set by the protocol of the blockchain.

While there is no required minimum pledge amount, pool operators can optionally pledge some or all of their stake to their pool to make their pool more attractive. The higher the amount of ada pledged, the more rewards the pool will receive, which will attract more delegation.

This is also known as Delegated Proof of Stake (DPoS). Cardano uses this type of consensus mechanism which uses the amount of stake (simply put as value of ADA delegated) held in the network to determine consensus.

Delegated Proof of Stake (DPoS) is a consensus algorithm that addresses the challenges of scalability and energy efficiency faced by traditional blockchain networks like Bitcoin.

Understanding Staking and Delegation

Staking involves locking up an amount of the blockchain's native currency, which in Solana's case is SOL, to act as collateral for transaction validation. Delegation, on the other hand, allows users to delegate their staking rights to a validator or stake pool.

Crypto staking comes with risks. There are several drawbacks to cryptocurrency staking: Your assets have limited or no liquidity during the staking lockup period. Staking rewards (as well as staked tokens) can lose value when prices are volatile.

Staking your ADA is done in a self-custodial way in Exodus, which means staking ADA is as safe as holding ADA in your wallet.

How profitable is staking ADA? ›

How much can I make staking Cardano? The current estimated reward rate of Cardano is 1.90%. This means that, on average, you can earn about 1.90% for current block/epoc rewards for Cardano.

The number of blocks a stake pool produces is proportional to the amount of delegation in the Stake Pool. From the total amount of ada that a pool of delegators is awarded, the stake pool operator (SPO) first takes the fixed fee of 340 ada, or maybe more if they have set a higher fixed fee.

Staking pools allow crypto holders to earn passive income by contributing to a pool of funds that collectively earn block validation rewards from a Proof of Stake (PoS) blockchain. Individually, small stakers can't access the rewards available to validators of PoS chains like Ethereum.

The platform offers at least three staking pools for delegators: Cafe1, Cafe2, and Cafe3. The two main pools have a saturation of 95.14% and 14.05%, with the third one having less than 1%. Naturally, the most saturated pool has a bigger fee but comes with more delegators and more active staked ADA.