Staking and Rewards
Stake your Cardano (ADA tokens) to a stake pool for a set period of time, you’ll periodically earn a return on your investment. Staking also helps the Cardano network; it’s the process by which validators (Stake pool) are selected to create a new block and process transactions.
In order to stake your ADA, you’ll need to move your funds to a wallet that supports staking, such as Daedalus, Yoroi, and AdaLite. Cardano addresses have separate keys for spending and staking, as a result your ADA will not be sent to a stake pool, meaning that it never leaves your wallet. When you delegate to a stake pool, your entire wallet is delegated. Whenever you deposit or withdraw ADA from your wallet, your stake balance will be updated. To delegate an undelegated wallet, 2 ADA will be deducted from your wallet as a one time registration fee, and will be returned once you undelegate your wallet.
-- Cardano doesn’t require your ADA to be locked in for a term. You could always undelegate your ADA at any time. This flexibility sets Cardano apart from its competitors.
Epoch and Rewards
Epoch is a Cardano accounting period equal to five days. Your stake will be taken a snapshot at the end of epoch and will be active at the start of next epoch. During epoch with your active stake, rewards of all blocks produced by the pool will be calculated by the upcoming epoch and will be distributed to you by the stake amount.
Assume you delegate during Epoch_0
Epoch_0 - Delegate your stake during Epoch.
- Snapshot occur at the end of Epoch
Epoch_1 - Your stake is now registered
Epoch_2 - Your stake is active and contributing to the stake pool
Epoch_3 - Calculating rewards from previous Epoch base on your stake amount
Epoch_4 - Earn first rewards from snapshot taken in Epoch_0
Epoch_5 - Earn rewards from snapshot taken at the end of Epoch_1
Epoch_6 - Earn rewards from snapshot taken at the end of Epoch_2
The amount of stake included in a snapshot is equal to ADA balance when snapshot occurs.
-- All block rewards received during an epoch will be deducted equal to
(Pool's fix fees minimum of 340 ADA + pool's margin x.x% as pool fees)
before being distributed to the delegators according to the stake amount.