Cardano staking provides traders and investors with an opportunity to be rewarded through the simple holding of Cardano (ADA). If you are looking to stake ADA, here is a basic overview of the best Cardano staking pools in 2024.

Understanding Cardano Staking 

What is Cardano?

Cardano is the decentralized Blockchain running with the Proof-of-Stake algorithm; hence, its consumption of energy compared to traditional Proof-of-Stake systems is quite negligible. It is promoted as the “third-generation” blockchain to fix and improve all the common scalability issues that afflict previous models of blockchains—in particular, Ethereum—with their skyrocketing gas fees.

Cardano runs a proof-of-stake protocol that enables users to participate in the network by staking its native cryptocurrency, ADA. Staking in turn supports the network’s operations by validating transactions and extending the historical blockchain record. It calls its digital currency ADA, after Augusta Ada King, Countess of Lovelace—often celebrated as the world’s first computer programmer.

The vision for Cardano extends beyond just being a simple means of transaction. It seeks to create a robust, decentralized application platform with many uses decided upon by the participants of the network staking ADA, ensuring decisions about the future of the blockchain and how it shall be updated are collective in nature.

Users can buy ADA on some of the larger cryptocurrency exchanges, including Coinbase, and it can also be used for multiple purposes. One can store ADA in an investment portfolio; one can send it or receive it as a form of payment, participate in staking to help run the network, and lastly, ADA is used for paying transaction fees within Cardano’s blockchain—underpinning its native character in the system.

Read more: Best Cardano NFT Marketplaces To Trade

What Is Cardano Staking? 

Cardano offers a staking mechanism for ADA token holders, similar to Ethereum’s approach. Staking ADA contributes to the security of the network and brings consensus under the Ouroboros protocol—also in use by Polkadot.

Cardano staking can be done in two ways: either self-validation of the network independently or delegating tokens to currently existing staking pools. The staking pools contribute to the general network for the validation of new blocks and processing transactions. Participants can delegate tokens to such pools for participation and earn rewards, much like interests on a savings account.

The initial amount required to stake is 5 ADA tokens. You do not need to move them anywhere; when you delegate, they will just sit in your wallet, but you will start receiving a percentage of each transaction fee according to the size of your stake. The higher the stake, the bigger the reward. Another thing you have to take into account is the fees that pool operators take—that varies, too. Right now, depending on the stake pool, the annual percentage yield on Cardano staking varies from 2% to 5%.

Read more: What is Cardano Staking (ADA) and Earn Rewards? 

How Staking Works in Cardano 

While most blockchain networks require users to lock up their assets to stake them, Cardano does this a bit differently. Instead of locking up ADA tokens themselves, users delegate their holdings to something known as a stake pool. The delegation represents your share of the network without having to handle the underlying infrastructure on your own.

This, in turn, makes it possible for each individual to benefit from staking on Cardano without running a full node by putting together ADA from many users in something known as a stake pool. Pool operators manage a node delegated to help the network run properly. Anybody can technically run a node, however, this requires server space, a stable internet connection, and technical expertise—all coming at a price. There will thus be rewards for its operators, who distribute this to delegators after deducting fees for operational expenses.

Rewards are dependent on successfully adding blocks to the blockchain. Cardano will slice time into epochs, which are five-day time periods, and further slice time into slots of about 432,000 one-second units. Each slot gets a slot leader chosen randomly, who is responsible for adding the next block. Only upon the addition of a block can rewards be made. These rewards are then distributed to the delegators at the end of each epoch and can either be withdrawn or staked again to increase returns for the future.

Benefits of Staking Cardano (ADA)

In the below section, we will explain in detail the advantages of staking Cardano’s ADA and how it can work to your advantage:

Earned Passive Income

Staking ADA turns the otherwise dormant tokens into income streams. You use and participate in the network while earning rewards, and your ADA still increases in value. It is the process of amassing more ADA without new investments. If you decide to re-stake your rewards, you will boost your passive income further, increasing your earnings over time.

Flexible Lock-Up Period

Probably one of the major pros of staking ADA includes the fact that users do not have to lock up their tokens. In contrast to some other staking mechanisms, Cardano’s system provides full access to tokens for the users. You are free to swap, send, receive, or sell your tokens while they are staked.

However, to make sure maximum rewards are yielded, it is best that your ADA remains in the delegated account until the close of each epoch in staking. Any ADA moved before this snapshot will not be eligible for rewards unless returned by the end of the epoch. The network calculates rewards based on a snapshot taken at the end of each epoch.

Self-Custody

When you stake in ADA, you continue to have full custody of your tokens. It essentially means that you are delegating your entire wallet and not giving away the ADA to anyone else. You, therefore, remain the outright owner and custodian of your staked tokens. In such a case, if you decide to stake through a crypto exchange, you may be giving away your tokens for the duration while it gets staked, so you ought to understand the terms and implications of using an exchange to stake.

Where to Stake Cardano

If you’re looking to stake Cardano, then investors have two major ways to go about this: centralized exchanges and crypto wallets. Both options come with their own positives and negatives, which differ significantly in the overall staking experience. Here is a detailed comparison for you to know what will work best for you.

Cardano Staking on Centralized Exchanges

In most cases, centralized exchanges include places where one can trade cryptocurrencies and provide an added advantage: staking services on assets such as Cardano.

Pros

• Centralized exchanges are generally heavily audited and verified.
• The high degree of infrastructure in these platforms results in reliable performance, with very little infrastructural downtime.
• Other than staking Cardano, one can also independently trade ADA and other cryptocurrencies, thus giving a wide range of financial activities within one platform.

Cons

• The transactional fees within a centralized exchange may become higher than the other modes of staking, for instance, through crypto wallets.
• Tokens staked on centralized exchanges are controlled by the very exchange. The custodial arrangement goes against the very decentralized mantra of assets like Cardano, wherein the exchange would retain custody of tokens.

Cardano Staking using Wallets

Another way to stake Cardano would be through crypto wallets such as Exodus Wallet and Youhodler. Crypto wallets are a way of storing cryptocurrencies, and some might offer staking features.

Pros

• The wallet holder has access to, and control over, the tokens. Some investors find it easier to handle personally.
• Normally, crypto wallets are cheaper in transaction fees compared to a centralized exchange; hence, they will be more affordable.
• Wallets are built for everyday use; most of them are said to have a user-friendly interface than the more technical trading platforms of exchanges.

Cons

• Crypto wallets, particularly those constantly being connected to the internet, just like hot wallets, can be less secure compared to the highly-regulated exchanges.

Best Cardano Staking Pools in 2024 

1. Cardanians.io

Cardanians are a group of cryptocurrency enthusiasts who have been officially named the ambassadors of Cardano. Their mission is basically to increase security and decentralization over Cardano.

The collective prides itself on very stable, transparent staking pools that help in making the network strong. Contributing beyond the purely technical front, Cardanians produce articles and translations that help support and enrich the Cardano ecosystem in many ways. Thanks to that, Cardanians was selected as one of the best Cardano staking pools at the present time.

APY: 3.5-4%

2. Coinbase

On the other hand, the reputation of Coinbase is equally fine, with its incredibly long list of supported cryptos and broad trading options. Excluding the rest, Coinbase offers quite beautiful staking opportunities for a variety of altcoins, including Cardano. It provides a user-friendly interface and, most importantly, strong staking pools that make it one of the best Cardano staking pools chosen by users.

APY: 1.9%

3. Exodus Wallet

Of the popular choices for best Cardano staking pool, Exodus Wallet is very prominent, thanks to user-friendly features and the efficiency of staking. Exodus Wallet is one of the most versatile blockchain wallets out there that enables users to store cryptocurrency assets safely, including ADA.

One of the main advantages of staking your ADA with Exodus is the native integration with one of the largest API providers out there—Everstake. With that, it means users’ funds to be staked will get forwarded automatically to the most optimal staking pools available at that very moment. Put another way, ADA traders are able to receive the best possible returns without having to manually select pools.

The Exodus Wallet offers its customers an APY of 3.3% on ADA stakes with flexibility over the staking periods. Users new to this wallet are supposed to stake their money for a minimum period of 20 days before they can get rewards. A major factor to note is that the distribution of rewards is 5 days after the end of the staking period.

APY: 3.3%

4. eToro

eToro will be very good for traders looking for a more functional and simple platform when it comes to staking Cardano. Having been simplified for usage and features oriented towards beginners, the whole process of trading and staking in cryptocurrency becomes much easier with eToro. Therefore, the list of best Cardano staking pools cannot lack this platform.

The most striking feature that sets eToro apart is the auto staking feature. It does not require its users to stake their ADA tokens on their own; rather, they need to enable a function provided within the platform. In this case, when a user buys ADA, he can set an auto-stake feature in settings, which involves an extra fee paid from the reward amount.

eToro has designed flexible, rewarding staking options. The APY users may expect will range between 4% and 5%. In addition, eToro offers several choices one can make regarding staking tenures, based on one’s preference. Traders will be given a monthly report that details their staking earnings, while distribution of rewards happens on a monthly basis to keep up constant income from staked assets.

APY: 4-5%

5. Nexo

While Nexo is far better at Cardano staking than the latter, it is on par with the former in terms of the overall rates of staking. Both platforms give highly competitive staking rates, although the flexibility and optionality offered by Nexo gives it a remarkable edge. Nexo is one of the best Cardano staking pools with the highest and most stable APY.

Nexo offers a wide range of options for staking, ranging from short to long-term time frames, which users can use in tailoring their required staking experience. Having various staking options could result in maximizing benefits for the user; Therefore, this may become very attractive for persons interested in exploring different ways of staking.

One of the particular characteristics of Nexo’s platform is that it allows users to receive, in kind, their staking rewards. In essence, it means that users can choose rewards in the same currency they are staking. It should be noted, though, that when choosing this option, the APY for each asset is lower than in cases when choosing to receive rewards in NEXO—the native cryptocurrency of this platform.

APY: 1-5%

How to Stake Cardano (ADA) on Wallet

Choosing a wallet

First of all, you are going to need a Cardano wallet that supports staking for your ADA. While there are many different wallets that support it, be sure to pick your wallet wisely because some wallet types might add more security risks or make you lose control over your assets.

Setting up a wallet 

After selecting a suitable wallet, you will be able to link it with a third-party staking pool or even send your ADA to a wallet in case that wallet allows this kind of transaction. This would ready you up for staking.

Delegating ADA to a staking pool

Of the 3,000 Cardano staking pools available, how one picks the right one forms an important decision. Every pool boasts its variety of metrics to consider, which include staking APY, stake size, blocks produced, pledge amount.

Review these metrics carefully to form a conclusion as to which pool will be best for staking your ADA.

How to Stake Cardano on Binance

Step 1: Creating a Binance account

The very first step in staking Cardano would be to create an account on Binance in case you have not already. You can just go to the website of Binance and sign up as a user. You can, of course, skip this in case you already have one.

Read more: Binance Referral Code 2024: Get $100 USDT Trading Fee Credit for Each Friend You Refer

Step 2: Setting up ADA staking on Binance

Once you have created your Binance account, you will have an “Earn” section where you can look up ADA using the search option. You can just tap the option to stake your ADA and select the amount you want to stake, then complete the confirmation.

How to Choose the Best Cardano Staking Pool

Yield and Saturation

Probably the most important metric to consider about staking pools is their annual percentage yield. APY simply refers to the percentage interest that shall be attracted to your staked ADA tokens within a year. The higher the APY, the better the returns on stake. Comparing APYs across different pools shall be instrumental in finding out which one gives the most attractive yield.

Saturation describes the size of the staking pool. The more saturated a pool is, the more blocks one can mint and hence win. However, the larger the pool is, the more people the reward has to be distributed to; that essentially means the reward per individual might be lower in very saturated pools. Cardano’s network handles this by reducing the reward rates of overly saturated pools; however, it remains important to be paying attention to the saturation level to ensure one gets a fair share of the rewards.

Pool Fees and Margins

Consider pool fees and margins while choosing a staking pool. The pool fees are for the use of the staking service; the margin, however, is the percentage taken from the total rewards after fees have been subtracted. Obviously, if you’re able to find pools that charge lower fees and margins, then the greater your share of the rewards will be. Therefore, giving minimal fees and margins will definitely make a huge difference in your overall staking profitability.

Using Cardano Community Resources

Using resources such as the Cardano Foundation website or community forums. All of them not only show key attributes that define each staking pool but also offer information touching on their performance, reputation, and user experience.

Conclusion

Cardano staking is an attractive opportunity to earn passive income while still maintaining full ownership of the tokens. The minimum requirement to stake, just 5 ADA tokens, makes it pretty easy to earn rewards. More importantly, your staked ADA is accessible and liquid—means you remain in control of your assets.

It means staking in Cardano not only gives you the chance to receive ADA rewards with convenience but also contributes to the greater goals of the Cardano ecosystem: financial freedom and decentralization. Here, you will be giving back for growth and stability in the network, thus, you are benefiting yourself and the Cardano community.

FAQs

How much Cardano do you need for staking?

The minimum amount of ADA depends on the staking pool you choose, usually from 5 ADA or more you can participate in Cardano staking.

Who is a Validator on Cardano?

Cardano validators are people who own their own Cardano node and are responsible for creating ADA blocks and processing transactions on Cardano.

What is the highest yield for staking Cardano?

As mentioned in the article, eToro is currently the platform that offers the most stable APY for ADA staking from 4-5%.

Is staking Cardano worth it?

Of course, you can passively profit from the amount of ADA you own so it’s really worth it.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.