What is staking?
Cardano (ADA) has something called staking. Here is an explanation of staking.
What is staking?
Staking is a mechanism in proof-of-stake (PoS) blockchains to reward people for holding crypto assets and participating in the network.
Cardano was changed from a centralized network to a more decentralized network with the Shelley upgrade. Many of the nodes are now run by the Cardano community.
The Proof of Stake (PoS) used by Cardano differs from the Proof of Work (PoW) used by Bitcoin and others in that it determines the percentage of the approval process based on the ratio of coins held to the total amount of coins outstanding.
Also, unlike mining with proof-of-work, proof-of-staking does not monopolize the rewards only for the miner, but also for the ADA holder by delegating.
The amount of staking determines the allocation of approval tasks in the network's blockchain. The staking pool that receives the allocation will have to do just a little bit of work. In other words, they have to be online at that moment to take advantage of the opportunity.
This is where the concept of delegation comes into play. The stake pool pool is online 24/7 on your behalf, so you don't have to. You can participate in the staking indirectly by "delegating" your ADA to the pool.
2. Advantages of Staking
By staking ADA, you can earn about 5% annual interest. You can think of it as earning interest on the crypto assets you hold.
The most important thing to emphasize about staking is the lack of disadvantages.
Delegating to a pool does not put your ADA at risk, because you are not transmitting your ADA. It is not stolen or lost.
The minimum delegation amount is 10 ADA, so you can free up the ADA in your wallet at any time.
After delegating, you can always change your delegation to another pool.
One risk is the initial staking cost, which is 2 ADA for the deposit fee and about 0.2 ADA for the transaction fee.
The other is when the stake pool operator gives up fees or does not generate blocks and there is no reward. But this is not a negative either. Of course, if you're staking, it's something you should pay attention to and watch out for.
(For more information on how to choose a pool, I've included a helpful link at the bottom.
Does anyone else think that this is a hassle? You will be paid automatically, so there is no need to file a claim. As long as you don't stop staking, your staking will continue automatically and you will continue to earn rewards. It's very easy to join staking and there's no effort involved afterwards.
(If you are still unsure, please read the FAQ. )
→here
In fact, data shows that about 70% of ADA holders are staking.（2021/05/22）
You can expect to earn up to 5% per year in staking with almost no risk while contributing to diversification.
Roadmap to Staking
→here
How to choose a staking pool to delegate to
→here
How to Staking