Staking Cardano raises many legitimate questions. We explain the most important ones.
What is Cardano?
Cardano is a new and unique financial and validation-based operating system. Cardano operates decentralized, energy-safing and stable. The coin of Cardano is called ADA.
What is Proof of Stake?
Proof of Stake (PoS) is a new way of building blocks for transactions in third generation blockchains. It is up to 99% more energy-efficient compared to the traditional Proof of Work (PoW) mechanism, still used in Bitcoin. Proof of Stake can be attributed as the green revolution of blockchain, as also bigger blockchains such as Etherum 2.0 strive to a PoS based voting mechansim.
What is staking?
A decentralized, third-generation blockchain like Cardano works on a common census to write the history of the blockchain. This common census is achieved by a Proof of Stake (PoS) protocol, in which all the nodes keep track about the blockchain and contribute their votes. It is very important that this network is highly distributed so that it can not be influenced by certain parties.
What is a staking pool?
A stake pool consist of one or more relay and one or more block producing nodes.
The pool is operated by a stake pool operator (here: cardano-stake.com). To run the stake pool, multiple 24/7 systems are needed for the different nodes. Multiple keys are to be generated in different environments under certain security conditions. Furthermore, the setup needs to be secured, maintained and monitored for a very long time.
A mainnet connected staking pool, such as cardano-stake.com, serves as a Proof of Stake validator. The pool actualy keeps track of the blockchain and makes proposals for the next blocks. Who wins the next block is defined by the Cardano protocol and builds on different factors. The assigned ADA is defined as the Pledge and the Active Stake from users. Users, who are staking their ADA to the validator, are called delegators.
What is a delegator?
Gen: A delegator is a person who lends money to a staking provider, so the provider can assign their vote for the next block more weight (up to a certain limit) during the block generation algorithm of the Cardano blockchain. The staking provider earns rewards as long as he is inside the block producing range of the overall node network. The gained rewards are mostly forwarded to the delegator (see costs/fees).
Tech: A delegator signs a staking contract with the staking pool provider, so that the stake pool can use this ADA during the block validation process.
What is pledge?
Pledge is the amount of ADA the stake pool operator directly delegates to his stake pool. The promised pledge must be met at any point in time to generate rewards. For cardano-stake.com, we decided to apply a small pledge to onboard new nodes in the near future. If you want to know more about pledge, we recommend this video from the Cardano Foundation. Starting from minute 15 in the video, it is also explained why you should not stake in an supersaturated pool.
Why should I stake with cardano-stake.com?
With your stake you invest in the extension of the Cardano network, based on 100% green electricity and efficiently operated nodes. We will go through decades of staking and take care about power consumption during onside production (hardware selection , renewable energy creation and power storage). For our cloud servers, we carefully select providers on a matrix basis.
We have experience in the IT Security and DevOps space for over 10 years and build substantial systems. Designing and operating secure productive systems is our key competence. We apply the same thoughts on the staking operation for Cardano.
You do not invest in one of the major providers and thus support the diversification of Cardano. Hereby you care about a decentralized, free blockchain.
Staking should be for everyone. To achive this, we maintain a low fee model. We take this small fee mainly to cover operation costs and to fund more projects in this area. The absolut overwhelming amount of rewards goes to our delegators. See more under Costs / Fees.
Can I stake from everywhere?
Delegate (Stake Cardano with cardano-stake.com)
Delegation means the process of subscribing to a staking pool. After the delegation, the stake pool operator takes your ADA into account when maintaining the blockchain and eventually producing blocks. You need to delegate to our staking pool
cardano-stake.com to participate on the rewards the stake pool receive from the Cardano network.
I want to do start right away - What to do?
Check that you have a Cardano compatible wallet. You can basically stake on cardano-stake.com with any wallet - as long as it is supporting Cardano staking.
If you do not have Cardano compatible wallet yet, check out our wallet comparision in 5 minutes.
In order to provide you with a step-by-step guidance, we produced blog entries for the mostly used wallets:
- LINK TO STAKE FROM LEDGER
- LINK TO STAKE FROM YOROI
- LINK TO STAKE FROM daedalus
Please go to your entry point and get your ADA on stake in less than 30 minutes.
How can I find you?
Un-Delegation means the process of un-subscribing from a staking pool. After the un-delegation, the staking pool operator takes this ADA out of the validation process (starting from the next epoch). The money is then returned to the delegator.
Can I un-delegate my ADA anytime?
Yes, while you only need to wait until the epoch ends. You can check the current epoch e.g. on the official cardano explorer. After the epoch ends, the registration certificate expires, and the ADA is free to be used in your wallet again.
Is my money safe?
Yes. From implementation, the stake pool operator never has any access to the funds provided for staking. The pool operator has no access to your private keys. Please make sure to store your private keys SAFE!
How do you harden your servers?
We designed a network of cardano nodes which is as closed at it can, while maintaining functionality. We strip down the execution surface by using isolated docker containers on different servers and limit the communication between them. Furthermore, we completely separated any online presence of cardano-stake.com from the actual node infrastructure - There is simply no link between them. This does not expose us to collateral attacks when a DDoS hits the website.
How do you monitor your service?
We see monitoring from an internal and external perspective and invested in both of it. Here are our goals:
From an external perspective, we operate independent servers, who are actively scanning our nodes and doing health check on external sites. If there is a major problem, we have Signal notifications in place to look into it.
From an internal perspective, we have alarm rules on the log files and different network- and os-specific checks in place to practice a predictive maintenance approach.
Our clear focus is to provide a high-uptime without producing too much energy consumption for Cardano. As we build for decades, we acknowledge that we need to dedicate time to build efficient systems.
What happens if …
… you suspend the service?
We are not even thinking about - but in that case your ADA is returned by the network.
… the servers are getting hacked?
In that case you may lose your rewards, but your funds remain safe on your wallet, as they are not exposed to the staking provider (KEEP YOUR COLD KEYS SAFE!).
… i lost my mnemonics?
Then your ADA is lost. Make sure to keep your mnemonics safe on multiple, secure locations! Never share them!
We take a 0,50% fee to deploy, operate and maintain the nodes.
How do you invest your fee?
We decided from day 0 to re-invest 50% of our net income into Cardano. Might it be additional fail-over nodes, improved security measurements,additional staking. In this order.
As we only cover costs with a million dollar stake at a 0.5% fee, we decided to cover all the costs from our private money for at least 5 years to support the Cardano network.