This is the place to start if you are new to this, and seeking useful information on Cardano, guidance on how to choose a stake pool, set up your wallet and delegate to a pool. Links to explore:
- The Essential Cardano page has wealth of information and links and provides a great onboarding guide.
- Got some time and really want to understand the goals and motivation behind Cardano? Start at Why Cardano?
- We also recommend r/cardano and the Cardano Foundation Forums where you will have access to advice and guidance, and an opportunity to engage with the community.
- This first whiteboard session from Charles Hoskinson explains how Cardano builds and improves on the 1st and 2nd generation projects such as Bitcoin and Ethereum.
What is Cardano?
Cardano is a Proof of Stake (PoS) blockchain network, providing a decentralized application (dApp) platform with a multi-asset ledger and verifiable smart contracts. Built with high-assurance formal development methods, Cardano has the scalability, interoperability, and sustainability needed for real-world applications with a small environmental footprint.
Based on peer-reviewed academic research, Cardano has an ethos of openness and transparency. All of the research and technical specifications that underpin Cardano are publicly published. The network is fully decentralized, and belongs to the community. From Q4 2024 the community decides its future through the built in governance features.
There are 3 founding entities for the ecosystem:
- Cardano Foundation (CF), responsible for working with institutions, businesses, regulators, and policymakers. They run the annual summits.
- Input Output Group (IOG), responsible for development activities under contract from CF.
- Emurgo, responsible for commercialisation and industry development.
What’s the roadmap?
There are 5 work streams to the project delivered in overlapping phases:
- Byron- foundations (Complete)
- Shelley- staking and stake pools, technical decentralisation (Complete)
- Goguen- smart contracts and native assets (Complete)
- Basho- scaling via Mithril, Hydra L2, and Leios (Ongoing)
- Voltaire- governance decentralisation (Chang Hard Fork expected September 2024)
Full details of the roadmap are available, there has been significant progress through 2020-2024. From late 2024 control of the Cardano blockchain passes to ADA holders with the Chang Hard Fork. At this point the founding entities will be simply another stakeholder.
What is a Cardano Stake Pool?
A stake pool is a node on the network that processes transactions and forges new blocks containing a record of those transactions on the Cardano block chain, using a PoS protocol called Ouroboros.
The protocol requires a reasonable number of stake pools to be online at any time, and uses verifiably random function (VRF) to select a leader for each slot that will forge the next block.
More stake increases the chance of being selected as slot leader, and each time the pool successfully forges a block it receives a reward which is shared proportionately with delegators.
Stake pool operators (SPO’s) need to have the skills to ensure reliable and secure operation. They deduct their running costs from rewards as well as specify a profit margin for providing the service.
How do I choose a stake pool?
Ignoring the fact that you already have a great option in ADAvault the best places to start are on PoolTool.io, ADApools.org, or Cardanoscan.io. They all allow pools to be ranked based on a number of characteristics:
- Live and Active Stake- shows ₳ staked this epoch and the next
- Saturation level- once the pool is bigger than ~74mn ₳ rewards for delegators start to decline
- Block production history- shows if the pool is reliable
- Pledge- how much ₳ pool operators have pledged to the pool
- Delegators- how many people are delegating to the pool
- Fixed and variable costs- how much does the stake pool charge for its services
- Historical returns for delegators
Using these factors a score is calculated which is used for Adapools and Yoroi. The Daedalus rankings use a similar metric and are considered authoritative.
We recommend starting with unsaturated pools that have a reasonable track record forging blocks, and then researching further to check pool goals. We also suggest restricting your selection to pools with a reasonable pledge amount. The pledge shows the amount that the pool have invested long term into the Cardono ecosystem. It is one of the factors that acts against excessive centralisation.
What wallets can I use?
The original wallets available for Cardano which support staking are:
- Daedalus– an open source full node wallet supported by IOG. Available for download here, Daedalus has a really intuitive user interface, and runs on Mac, Linux and Windows.
- Yoroi– an open source light weight wallet supported by Emurgo that runs in most browsers, for example Chrome, Edge, iOS and Android which gives coverage on a wide range of end user platforms. You can find more details on Yoroi here. Yoroi have released a mobile version for the wallet available from the Google and Apple App stores.
However there are an increasing number of the 3rd party wallets. For browser based wallets that support dApps (for example jpg.store) we currently recommend:
- Lace: A IOG maintained wallet that supports Chrome, Brave, Edge and Opera via a plug-in browser extension.
- Nami: Another community developed wallet which is very minimal but easy to use, now also maintained by IOG.
- Vespr: A new addition to the stable, very intuitive and attactive UI design, works well on iOS.
You can create a number of staking wallets to delegate, future releases of Daedalus and may support multi-pool or portfolio delegation from a single wallet, some 3rd party wallets already do.
How do I delegate?
Delegation is intuitive in most wallets. The video below show the process for Daedalus.
More information on Daedalus is also available on the IOHK support page.
Where can I buy Cardano Ada?
We recommend Kraken because we have long experience of the exchange, and believe they have fair charges, deep liquidity in most traded cryptocurrencies, and a wide range of traded pairs.
They have good in country presence as well which matters when you are transferring to or from fiat currencies.
We do not recommend that you keep deposits on exchanges any longer than necessary to trade. Once you’ve traded move them back to a secure wallet that you control. Kraken have reasonable deposit and withdrawal limits, especially once KYC checks have completed.
You can also buy ADA directly via the Yoroi wallet due to their integration with Changelly. You may find the rate less competitive than Kraken, however it is certainly very convenient. You can also buy ADA from Coinbase.