With Cardano moving from Ouroboros Classic to its Ouroboros Genesis consensus algorithm, staking functionality will be enabled for the general users and with it, opportunities to earn interest on holdings of ADA. Cardano recently showed us a few more details about how its staking pools will work. Read on to prepare for staking on Cardano before its integration in the protocol’s Shelley update.
The Cardano stake pool explainer is now live, you can find out more here and also check out the stake pool FAQ: https://t.co/ROcXPkrXuU #Cardano #CardanoCommunity #blockchain #staking pic.twitter.com/TTSHGxNW4D— Input Output (@InputOutputHK) 2 April 2019
For those that don’t know, staking is a term used to determine who validates the next block on the chain. The higher a user’s stake in a network then they are more likely to forge the next block. Stakers will be rewarded for their effort and honest participation in the network.
If we look at the IOHK blog, they have said:
“In a proof of stake (PoS) blockchain protocol, the ledger is maintained by the stakeholders that hold assets in that ledger. This allows PoS blockchains to use less energy compared with proof of work (PoW) or other types of blockchain protocols."
The user selected for created the next block is dubbed as the slot leader. Users have to be online at the right time in order to become the slot leader though. Of course, being online all the time might not be a practical solution for stakers, they delegate their stakes to a stake pool. The stake pool owner must ensure its systems are online all the time.
Stake pools will enable pool users to combine their staking powers and stake as a bigger body. They are comprised of a group of people on a network who are dedicated to being online all the time to increase the odds of a pool member becoming a slot leader.
Even if you are a user who doesn’t have any programming experience or limited knowledge on the subject matter, you will be able to stake. By delegating to a pool through the Daedalus or Yoroi wallets, a Cardano holder will be able to earn block rewards through ADA.
There isn’t a release date for the update as of yet but Cardano said this on its website, “the testnet is under development and will be ready soon. The timing for the mainnet will depend on the amount of effort, adjustment, and enhancement needed to get the testnet capability and code to mainnet readiness.”
With this being said, leaders within the project have specified that staking will go live later on in the year.