Just Buy ADA and stake them and sleep for a while.
How you can start making passive income with your ADA coins. Let’s check first what is staking.
What Is Staking
Staking is the way of earning rewards for holding certain cryptocurrencies. Specifically proof of stake cryptos. Like ada.
Not proof of work cryptos like Bitcoin. With proof of stake, you’re literally putting your currency to work for you, and it’s making you money.
The difference between proof of stake and proof of work;
Most cryptocurrencies are decentralized at least they should be, which means there’s no central authority. But you still need a system to ensure that there’s no fraud, no mistakes and no funny business on the ecosystem.
With proof of work like Bitcoin, miners do this. Miners use specialized computers to solve complicated hash puzzles, and the first miner to solve a specific hash problem then earns the right to add the latest block of transactions to the blockchain. And they’re paid in Bitcoin for facilitating this transaction.
With proof of stake with a system like Cardano and ADA, transactions are verified, and all the funny business is prevented by people who are invested in the blockchain.
By holding the crypto and staking it, I meant that your currency is actually working for you.
So basically, what happens with the most proof of stake systems is you stake your crypto, and there’s a kind of lottery where you’re randomly chosen to complete a block of transactions, and that reward is proportional to how much crypto you have staked.
This means someone staking 100 ADA will receive 10x more staking rewards than someone who’s staking ten ADA.
It’s all proportional. To increase your odds of reliable rewards and passive income, you then delegate your ADA to a staking pool with a large number of other ADA holders coming together to process transactions. Create blocks and get paid rewards. So that is staking.
What is the risk? With ADA, there really aren’t risks because the crypto never actually leaves your Wallet. Which is awesome.
You’re not actually trusting it elsewhere. So there’s not a risk of losing it unless you lose your own password or, you know, send it to someone you shouldn’t.
The worst-case scenario when staking ADA is if you’re in a staking pool that simply doesn’t create any new blocks over a five-day period. So basically, the lottery didn’t choose you.
However, this can be mitigated by just choosing the right pool to choose a good staking pool.
Top questions about staking ada.
How long does it take to start seeing staking rewards?
In the first time, it can take 15 to 20 days and then it should be every five days after that.
Is there a minimum amount you need to stake?
Yes, you have to have ten ADA.
Can you remove your ADA at any time from the staking pool?
Yes, you can, which is awesome for the Cardano system because, in some other systems, you have to have it locked up for quite a while.
What is the rate of return on ADA?
It should be about 5.5 per cent returns annual, but that can vary a little bit depending on the staking pool you’re in.
What is pool saturation?
This happens when a particular pool has more data delegated to it than is ideal for the network security. So basically, Cardano doesn’t want anyone pool to have too much power over the network. So it can’t hurt the network you want to avoid oversaturated pool because it can offer diminishing returns.
Let’s get into how to stake the best and most secure way to stake ADA is by using the Daedalus Wallet.
This Wallet was actually developed by IOHK, the research company that built Cardano ada. So you can’t really get any better to stake ADA. Read More…