Cardano is a Proof-of-Stake blockchain platform: the first to be founded on peer-reviewed research and developed through evidence-based methods. This blockchain wants to solve security and sustainability issues. The native token of Cardano blockchain is ADA.
Cardano works on a specially designed Proof-of-Stake (dPoS) blockchain protocol for consensus called Ouroboros. This consensus mechanism allows for ADA to be sent and received easily and securely at all times, while also ensuring the safety of smart contracts on the Cardano blockchain.
Staking is the process by which blocks are created on a Proof-of-Stake (PoS) protocol. This involves locking an amount of the native token (ie ADA) into a smart contract to become a validator. For each block your validator produces you earn rewards. PoS is overtaking the original Proof-of-Work consensus algorithm as it is more efficient and eco-friendly.
By becoming an ADA validator you are contributing to the network’s block production and securing it while making rewards.
Staking is considered as one of the safest and most predictable ways to get rewarded in the crypto space. It is a natural and advantageous aspect of many protocols as all assets are created through the blockchain’s in-built inflation. By staking ADA tokens, you help secure the network and earn rewards at the same time.
By not staking your unused ADA you cannot earn rewards off of them and are not contributing to the security of the network.
Plus if you do not stake, your assets' value will be eroded from protocol inflation.
There is no minimum token requirement to delegate. You will need to pay a delegation fee to your pool before allocating your stake to it. To stake ADA, you’ll only need to access Kiln's dashboard and you can stake it in just a few clicks. Select the account you want to stake on, the amount of ADA and connect your wallet:
Unstaking ADA is one of the simplest unbonding processes in the crypto space. Unbonding is immediate, and you can use your ADA as soon as you remove your stake from the validator pool.
Detailed information about Kiln validators can be found here.
Using a staking pool to delegate your assets to an ADA validator, you can generate rewards based on collected transaction fees from each block processed. Beyond this there are staking incentives put in place from when staking on Cardano was launched in 2020. This amounted to 13.8 billion ADA set aside as a reserve to push for more stakers. The amount of ADA you have staked in the pool will dictate how much you earn in rewards as they are directly proportional to your stake.
Kiln is the leading enterprise-grade staking platform, enabling institutional customers to stake ADA, and to whitelabel Solana staking functionality into their offering. Our platform is API-first and enables fully automated validators, rewards, data and commission management.
We are serving thousands of businesses worldwide. Our clients can seamlessly stake their coins from our dashboard, a hardware wallet, a browser wallet, a B2B custodian, a crypto exchange or just their favorite investment app. Kiln makes staking Solana easy, secure, and accessible to everyone.
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Proof-of-Stake (PoS) is a type of consensus mechanism used to validate cryptocurrency transactions. Through PoS, validators can contribute to the block production of a chain while keeping environmental concerns to a minimum, which is becoming an increasingly large issue in Proof-of-Work.
By staking capital rather than energy, validators risk losing a portion of their value and future potential for staking by misbehaving while creating blocks. This incentivizes collaboration and minimizes malicious activity in the consensus process.
Both are consensus algorithms, helping to democratize one participation to securing a blockchain. DPoS is an iteration of PoS combining real-time voting with a system based on reputation to reach consensus across the blockchain. Voting power is still determined by how many tokens they have.
Rewards for staking ADA and delegation are awarded at the end of every epoch. On the Cardano chain, an epoch is equivalent to five days. Rewards are calculated according to transactions processed on validated blocks over the period and come with an in-built monetary incentive along with the collected fees. A current estimated reward rate is around 3.19% per epoch.
Yes, rewards accrued through staking Cardano are re-delegated back into your original amount. In this way you are consistently compounding your stake and increasing your future rewards.
The Cardano network does not implement slashing into its staking process so the risks associated with staking ADA are minimal for both validators and delegators.
There are no minimum or maximum amounts associated with staking Cardano however, fixed fees are included in the delegation process which will need to be considered. Check that you have enough ADA to stake on top of these fees to effectively stake your assets.
While you may self-custody your staked ADA (ideally using a Ledger hardware wallet), you may choose a third-party custodian to control the withdrawal of your staked ADA (ie Fireblocks).
There is no minimum lock up period associated with Cardano, you can release and use any ADA you are staking as soon as you unstake.
Every slot the validator is expected to sign attestations. If submitted attestations are good the validator receives rewards, otherwise it receives penalties. In case the Cardano validator is offline it will also receive penalties.
The average block time on Cardano is ~20 seconds, though this is fluid and can change with time depending on various factors.
To run a full node on Cardano requires a certain degree of technical understanding. However, delegating your ADA is a lot simpler and can be done with even a small amount of capital. You will need a funded wallet with which to delegate your ADA, including some funds set aside for delegation fees.
Unbonding is simple and instantaneous, you can use your coins as soon as you decide to unstake.
Rewards are received after every epoch, five days.
In the context of Proof-of-Stake blockchains, the gross reward rate (GRR) refers to the total or gross amount of rewards earned from staking before deducting any fees or expenses. This is a reward rate that fluctuates with the operations of the protocol and the performance of validators, it is not set by Kiln. The net reward rate (NRR), on the other hand, takes into account the deductions or expenses, providing a measure of the actual rewards received after subtracting fees or costs.