Where Can I Stake Cardano?
Our expert guide on how to stake Cardano, where to stake, and the safest ways to stake ADA.
What is ADA?
Cardano is a blockchain platform and cryptocurrency known as ADA. It was created to provide a more secure and scalable infrastructure for the development of smart contracts and decentralized applications. Unlike some other blockchain projects, Cardano places a strong emphasis on academic research and peer-reviewed development.
ADA is the native cryptocurrency of the Cardano network. It can be used for various purposes, from sending and receiving funds to participating in stake pools to help secure the network.
What is staking?
Crypto staking is a process in which cryptocurrency holders 'stake' a certain amount of their coins as collateral to support the operations and security of a blockchain network. In return, stakers are rewarded with the native crypto, in this instance, ADA.
For Cardano, ADA holders can participate in staking by delegating their ADA to a stake pool or, if they have enough ADA, by running their own stake pool. When you delegate your ADA to a stake pool, you're effectively lending your coins to that pool to help secure and validate transactions on the Cardano network, and in return, you receive a portion of the rewards earned by the stake pool.
How does Cardano (ADA) staking work?
Staking ADA is easy, all you need is a wallet that allows Cardano staking. Here’s how it works:
You transfer your ADA to a staking-compatible wallet like Daedalus or Yoroi.
You delegate your ADA to a stake pool. These stake pools are managed by groups of validators responsible for creating new blocks on the Cardano blockchain.
The selection of validators within the stake pool to create new blocks is randomized. If your validator is chosen, your pool will receive a reward.
These rewards are then distributed proportionally among all ADA holders who have delegated their stake to your specific stake pool. The more ADA an individual holds and delegates, the greater their share of the rewards.
Staking rewards are automatically added to your wallet balance. You can then choose to either restake your rewards to earn more or withdraw them.
3 best Cardano staking platforms
Now you get how the process works, let’s look at some of the best Cardano staking platforms to pick from.
Developed by the Cardano team, Daedalus is the official desktop crypto wallet for Cardano. When you install Daedalus, you gain access to a complete replica of the Cardano blockchain, making it a full-node wallet.
When you stake your coins through a Daedalus staking pool, your voting power contributes to network security, and your ADA remains securely under your ownership. ADA staking rewards are substantial, at around 5% APY. While Daedalus requires substantial storage space due to storing the entire blockchain, it is generally considered the most secure option for staking ADA.
Yoroi is a lightweight and user-friendly wallet for staking ADA coins. Its browser extension format ensures ease of use. Yoroi provides features to filter staking pools based on cost, pool size, and ROI, optimizing your reward potential. Similar to Daedalus, Yoroi offers a staking reward of around 5%, without the need to download and run a full-node wallet.
3. Exodus Wallet
Exodus is an excellent choice for those seeking a versatile wallet supporting multiple coins, including ADA. With Exodus, you maintain full control over your wallet, like with the two options above, but instead of being a Cardano-only wallet, Exodus supports more than 100 different tokens and it’s available on both mobile and desktop.
Why can’t I stake Cardano using a crypto exchange?
You can stake Cardano using crypto exchanges like Coinbase, Binance, and Kraken. But in these instances, you won’t maintain control over your crypto anymore as the exchange will manage your crypto on your behalf. As such, and given how easy it is to stake Cardano with a non-custodial wallet, most investors opt to use a non-custodial wallet to stake Cardano and maintain control over their keys and crypto. As well as this, in the US, exchanges that provide staking services have faced considerable scrutiny from authorities including the SEC, and as such, many have withdrawn these services for US customers.
How to choose the right Cardano staking pool
There are thousands of Cardano staking pools to pick from, so to help you choose, keep the following guidelines in mind:
Choose a pool that has a history of producing blocks. This information is typically available in the "blocks" column for each pool.
Opt for a pool with less than 60% saturation. Staking pools that exceed this threshold stop distributing rewards to promote decentralization. Periodically check your chosen pool's saturation status to ensure it remains below the limit. Currently, staking pool rewards are exclusively available for pools with less than 64 million ADA staked. A good rule of thumb is to select a pool with 30 million ADA or fewer staked.
Some users prefer to have the option to contact the stake pool operator. Clicking on the operator's name will lead you to their profile, where some operators provide contact information and links to social groups. Gathering more information about the operator can help build trust, assess their competence, and align the pool's objectives with your own.
What are the risks of staking Cardano?
Staking any cryptocurrency including Cardano isn’t without its risks, and you should be aware of some of the more common risks associated with it before you stake any crypto.
The value of ADA can be volatile. If the market experiences significant fluctuations, the value of staked ADA may change.
Technical issues, bugs, or vulnerabilities in the staking infrastructure could pose risks. It's essential to use reliable staking platforms with robust security measures.
The regulatory environment for cryptocurrencies and staking may evolve. Changes in regulations could impact the legality and profitability of staking activities.
Cardano is built on technology, and like any network, it may face issues such as downtime, or attacks. These events can affect staking rewards and the overall stability of the network.
…and don’t forget the tax bill
Remember, if you’re staking Cardano, you’ll need to pay tax on your staking rewards. Depending on where you live and the crypto tax rules in your country, you may pay Income Tax upon receipt of your ADA rewards, as well as Capital Gains Tax if you later sell (or otherwise dispose) of your ADA rewards.
Your frequently asked questions...
Is it worth staking Cardano?
More than 64% of the Cardano supply is staked - so it’s certainly a popular option for ADA holders. Of course, you should always DYOR to make sure you understand staking before conducting any transactions.
How profitable is staking ADA?
Staking rates are subject to change, but generally speaking, investors can expect around a 5% APY from Cardano staking at the time of writing.
How risky is staking Cardano?
Given you can use a non-custodial wallet to stake your Cardano, the risks are lower than using a third-party as you maintain control of your crypto. This said, staking does have unique risks like slashing you should be aware of before staking.
What’s the safest way to stake Cardano?
The safest way to stake Cardano is with your own non-custodial wallet. This ensures you maintain complete control over your keys and your ADA. You can also pair hardware wallets like Ledger with staking wallets like Yoroi to further improve your security.