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Cardano staking guide

You can never end up with less funds than you started with due to staking.

Cardano staking guide

You can never end up with less funds than you started with due to staking.

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TL;DR: Cardano is third-generation blockchain, and it will change the world

Being the first proof-of-stake blockchain platform to be created, Cardano is based on peer-review research and has been developed using evidence-based methods. It combines pioneering technologies to provide unparalleled security and sustainability to decentralised applications, systems, and societies. Together, Cardano and its team of top-notch engineers seek to enable positive progress and change by redistributing the power that’s currently in the hands of unaccountable structures to the masses.

 

The platform is named after Gerolamo Cardano — an outstanding Italian mathematician, engineer, philosopher, doctor and astrologist of the XVI century. It was created by the company IOHK: Input Output Hong Kong (currently known as Input Output Global). A key figure is Charles Hoskinson, its CEO. Charles is present in the video ,providing a detailed 50 minutes explanation of Cardano in this section. It has its own cryptocurrency called ADA, token symbol ₳.

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TL;DR: ADA (₳) is the native token of Cardano. 1 ADA = 1,000,000 Lovelace

ADA (₳) is the native token of Cardano. This simply means that ADA is the cryptocurrency run by the Cardano system. It is named after Ada Lovelace — a 19th-century mathematician who developed the first algorithm that could be executed by a machine. She was the daughter of the poet Lord Byron.

 

Lovelace is the smallest unit of ADA, equivalent to one millionth of one token. A Lovelace is to ADA what a Satoshi is to Bitcoin. 1 ADA = 1,000,000 Lovelace

 

ADA is a digital currency. Any user located anywhere in the world can use ADA as a secure exchange of value – without requiring a third party to mediate the exchange. Every transaction is permanently, securely, and transparently recorded on the Cardano blockchain.

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TL;DR: Native Assets are non-ADA tokens created on the Cardano network. NFTs are unique native assets minted in 1 piece only.

Functionality. One of the endeavours of Cardano is to enable the transactions of foreign cryptocurrencies on Cardano network. This means that in the future it will be possible to send Bitcoin over Cardano, paying Cardano fees instead of Bitcoin fees. As a first step towards this development, support of Native Assets has been provided.

Native Assets are tokens created on Cardano and are native to it. At this moment in time, anyone with a bit of technical knowledge can create a new token right on the Cardano blockchain. These assets have different metadata entries, such as its creator name, url, link to an image, or any text data that the creators put in it.

 

If only one unique Native Assets was minted, then it is counted as an NFT — non-fungible token. In many cases, such tokens are bound to unique images and an ownership of a token usually implies exclusive ownership of an image. 

SHUTA-inwallet-optimised3

HYGGE Native Assets. As part of learning we minted a token for fun: “ShutUpAndTakeMyADA“. It is based on a famous meme from Futurama. The image attached to the token is created in the style of Wassily Kandinsky with Charles Hoskinson (founder of Cardano) replacing Fry from Futurama.

 

We imagine that receivers of those tokens will be able to use them to send along with their ADA for entertainment. Those tokens were created in the quantity of 99999 and no more can be created. If you would like to obtain some of them, please contact us or keep an eye of our activity: we plan to occasionally give them away in very small numbers, as well as send out to our delegators from time to time. 

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TL;DR: Register at exchange (i.e. Binance), verify account, click one of the “buy” buttons

The first step is to open an account on a crypto exchange that supports the Cardano token ADA. If you are unsure of which exchange to choose, we suggest you consider using any of the biggest and most famous ones, such as Binance, KuCoin, Kraken (mostly used in Europe), Coinbase (mostly US).

As a second step, you will have to pass KYC (Know Your Customer) verification. Normally this would include multiple stages, where the basic is identity verification, followed by more comprehensive steps, such as address verification. Steps beyond basic are not mandatory, however passing them unlocks more features and/or extends the funds amount limits.

On an average day you will be asked for:

• Your full legal name

• Your current address incl. proof

• An email address and phone number

• A payment method to fund your account: most exchanges support both credit cards and direct banks transfers

Photographic proof of your identity (such as a driver’s license or passport)

As soon as your account is validated, you can deposit fiat money (“normal” money, accepted by the government) to your account. Now you can start trading! It might be that you have to buy Bitcoin or another currency first, as ADA cannot be bought directly with every fiat currency. For example, sometimes ADA can be exchanged for EUR, but not for GBP.

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TL;DR: Desktop wallet Daedalus or browser & mobile wallet Yoroi

ADA is always kept on the Cardano blockchain in an encrypted entity, which is called a “blockchain wallet”. A wallet on the blockchain can be accessed through different  interfaces, we will refer to them here as “software wallets”. A private cryptographic key is needed to access a wallet on the blockchain. 

 

When you buy ADA on a cryptocurrency exchange, a blockchain wallet is automatically created for you and ADA is stored in it. Exchange, however, is not giving you the access to the private keys, but instead it is just ensuring that a person with an access to the exchange account, will be able to manage funds in the blockchain wallet.

 

There is a popular saying “not your keys = not your wallet”. It means that nevertheless exchange is enabling you to manage the Cardano funds in the blockchain wallet, this access is dependent on that exchange, a third-party. Whilst this can be convenient, there are two good reasons to trouble yourself to hold your ADA in your own blockchain wallet, accessed through software wallet.

 

— First, your cryptocurrency exchange account is accessed through their server, which means it is accessible for hacking attempts 24/7. If this happens, there is not assurance that exchange will be intending to compensate the losses.
— Second, having ADA on exchange, you will not be able to access advanced features, such as lock-free staking, voting and others.

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TL;DR: Watch the video. And like it. And subscribe, you know

There are multiple software wallets available, with different perks and abilities, however we recommend two official options made for Cardano: Daedalus and Yoroi. We tried compiling a comprehensive written tutorial on software wallets, but it turned out a bit long and not very user friendly! So to make things easier, we made you a video tutorial instead! Please do go ahead and check it out down below.

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TL;DR: Lots of information, watch the video

There are many resources online serving identical purpose, however many of them do not uncover details of the mechanism. We have attempted to give you an easy to understand explanation that is both detailed and comprehensive, so that those seeking to make an informed decision can refer to our video tutorial of staking in Cardano.

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TL;DR: Staking is listing one’s ADA as available to be selected for signing a block

Anyone with ADA can participate in writing the Cardano blockchain, in proportion to the quantity of ADA held. The more ADA you have, the more blocks you will be asked to sign. As an incentive for ADA holders to participate, each signed block entitles you to a reward (in ADA).

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TL;DR: Delegation is an act of handing over the right of staking ADA on your behalf to a pool with other ADA

In order to be selected to sign a block, one should run a node with a fully synchronised blockchain and stake their ADA in it. For instance, this is possible by using a Daedalus wallet. The more ADA is being staked, the higher is the chance that this wallet will be selected by the Ouroboros protocol to sign the block.

 

Delegation is an act of handing over the rights to mint the blocks with your ADA. What is very important here is that you never give up control of the assets: they always stay with you, all you are doing is giving the right to use its signing power. 

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TL;DR: It is an entity, holding the right to sign blocks on behalf of group of ADA holders

A stake pool is a fully synchronised Cardano node which represents the collection of ADA staked by a group of individuals. Anyone can participate in an existing stake pool or run their one.

Stake pools are needed, as they increase the chance of being selected for signing a block, as they allow a bigger amount of ADA to be staked. Usually a community of delegators — actors, delegating to the pool — is naturally formed, being united by the same brand.

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TL;DR: On average 4-6% a year, use our rewards’ calculator

Each block minted is rewarded with varying amount of ADA. Every 5 days — this period is called “epoch” — those rewards are calculated and distributed amongst delegators according to their stake. Thus, rewards are only paid if the pool has minted blocks.

 

At the time of writing this guide, a pool needs to have around 1 million ADA staked to have a 100% probability to mint 1 block per epoch. Probability, however, does not guarantee the event: it could be 0 blocks, it could be 10. This random selection is handled by the Cardano staking protocol – Ouroboros.

 

Nevertheless, this probability allows for the staking rewards to average out over a sustained period of time, which means that a functioning stake pool should provide delegators with around 4-6% of yearly return. Rewards also compound over time, try out the calculator tool we’d made.

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TL;DR: Check out our rewards’ calculator for the payment schedule

Rewards are paid every 5 days. This period is called an epoch. When you delegate for the first time, you will receive rewards 3 full epochs after the event. Consider using our calculator tool to find out when you will receive first rewards after initial delegation, and in which amount.

Below is a sample table explaining what happens with your stake, as well as “when rewards”

Epoch Your stake Your rewards
1
You delegate your stake
2
The change is being processed
3
Your stake is active
You are earning rewards
4
Your stake is active
Rewards from epoch 3 are processed
5
Your stake is active
Rewards from epoch 3 are paid
6
Your stake is active
Rewards from epoch 4 are paid
7
Your stake is active
Rewards from epoch 5 are paid and etc
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TL;DR: Check if pool mints blocks, has reasonable parameters and does what you like.

Performance. To receive rewards, a pool has to be minting blocks. Not only the size of a stake matters, but also the robust, scalable, high-available technical setup with failover and redundancy. For now, the Cardano node hardware requirements are rather low: 1-2 cores, 8GB RAM and good network. It is expected, however, to experience increase in the used compute and network traffic in the future, especially following the deployment of smart contracts and further adoption of Cardano.

 

Decentralisation. The more stake is controlled by a single entity relative to the total stake — the higher is the influence of that entity over the network. At the moment of writing, there are huge actors, such as 1PCT with 29 pools opened or Binance with 62 pools. Consider staking with Single Pool Operators or at least avoiding gigantic enterprises.

 

Community. Check out the pool’s website and activity. Whether the SPO (Stake Pool Operator) is active and reachable, whether you like the values and contribution of the pool. If you decided to support a smaller pool, that does not mint blocks every epoch, make sure they have a decent marketing strategy and the growth is expected.

 

Specs. Overall, every performant stake pool will have an average return around 4-6%, thus what matters most is whether you personally feel like supporting this specific pool: would you like more of such pools to exist? However, there will be a small difference in return when looking at the specs. Check out our further explanation on this matter below.

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TL;DR: Your stake pool of choice

Hygge is a concept of Danish origin and it can be described as a feeling of happiness through simple things and events. This is how we live our lifes and this is how we operate the stake pool. All parts of our infra have been automated, so that human intervention is almost unnecessary. This allows for a stake-and-forget approach enabling you and your hygge. 

 

The stake pool operator is not a Dane himself, but he is a huge fan of Danish culture, used to work for Novo Nordisk in Copenhagen and has many Danish friends. Read more about our values and motivation.

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TL;DR: 4 dedicated cores, 16GB RAM per node

Pool nodes are based in an EU data centre, powered by renewable energy. Servers are placed in a high-available cluster adjacent to the hardware of the biggest HFT firms. Every component of the system is fault-tolerant and backed up. Our robust setup is benefitting from industrial grade 24/7 monitoring bound to the Cardano services. If anything goes wrong with a node – another one kicks in immediately with next to zero downtime.

 

Relays are connected to data centre networking with fibre optics. Currently this allows for an average response time of 372 ms from all HYGGE nodes, which is important in the event of slot battles between the pools. 

Every node
whole cluster
Every node
whole cluster
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  • Pool nameHYGGE

    A word or a combination of words by which a person, place, or thing, a body or class, or any object of thought is designated, called, or known.

  • Lifetime luck99%

    Shows how lucky the pool was in creating blocks comparing to how many blocks should it have minted according to the active stake.

  • Live stake₳ 4,143,243

    Amount of ADA that is committed to stake in the pool as of now. If some ADA has been added or removed from the pool, this change will be reflected on this figure even if it has not yet been processed by the blockchain. It takes 1 full epoch to apply the changes.

  • Active stake₳ 4,201,176

    Amount of ADA that is actively staking in the pool as of current epoch.

  • Lifetime ROA3.925%

    Estimated ROA (Return of ADA, Annualised), based on the lifetime performance of the pool.

  • Pledge₳ 250,000

    Amount of ADA that pool operator has staked in the pool. Pools with very low pedge will have lower rewards in the future.

  • Blocks minted122

    Count of blocks minted so far from the beginning of the pool operation. Just a curios number.

  • Fixed fee₳ 340

    Amount of ADA that is substracted from the overall pool rewards per epoch. For example, if a pool earned ₳20,000 — then ₳19,660 is split amongst delegators according to their stake and ₳340 goes to the pool operator.

  • Flexible fee0%

    Amount of ADA that is subsctracted from the overall pool rewards per epoch, this time - in percentage. In out opinion, values in between 0% and 3% are reasonable.

  • Saturation6.14%

    Each stake pool can accomodate a limited amount of ADA for staking. At the moment of writing, the cap is at ₳64,000,000. Saturation shows correlation between the current live stake and the limit.

let's talk

about your stake .

Stake your ADA. Receive compound rewards.

let's talk

about your stake .

Stake your ADA. Receive compound rewards.

Welcome whale

Do you have a big stake and contemplate joining HYGGE?

    Welcome whale

    Do you have a big stake and contemplate joining HYGGE?