Click button, make money
A brief history of staking for the uninitiated
You’ve all heard about “mining” as it pertains to Bitcoin and Ethereum, right? Mining is necessary because these are proof-of-work (PoW) blockchains, and they require a lot of computing power to do all the verifications and validations to make it all work. The main complaints against PoW are that it’s slow because of the computing and expensive because of the computing fees.
The fees are a big problem, and that’s why Ethereum 2.0 is important — it represents the Ethereum network’s move from proof-of-work to proof-of-stake. It’s also one of the main reasons why there’s so much excitement for “next-generation” networks, and perhaps none have more hype than Cardano.
Proof-of-stake means that instead of having miners competing and racing to find the next block in the blockchain, validators are randomly assigned to do it. To be a validator, you must “stake” collateral. Rewards granted to miners for discovering a blockchain block are instead given to the selected validator for doing its job.
That brings us to the point of this story. Not everybody wants to be a validator, but you can delegate your tokens to a validator and earn a share of the rewards. There are many ways to do this, but perhaps the easiest is to do it through a wallet provider, like Guarda. I’ll show you just how easy it is to stake Cardano using Guarda’s wallet in this story.
This tutorial assumes you have a Guarda wallet and that you’ve transferred ADA into it. Signing up for Guarda is pretty easy; go to guarda.com and follow the prompts. I purchased some ADA from CoinEx (note: referral link) and transferred it to my Guarda wallet, but there are many ways to do it.
Let’s stake some ADA!
Just a heads-up: this is going to be a short tutorial because it’s so easy. Begin by logging into your Guarda wallet and finding your Cardano wallet. Your balance should be visible, along with a Staking link below it.
When you click the Staking link, it expands to show a staking region. This is where you’ll see & claim rewards and stake/unstake. Click the Stake button to open a new Staking tab in the wallet.
Be sure to read the fine print. The approximate yield is 5%. Okay, that’s pretty good. Your funds will not be frozen and will remain free to move. Wait, what? The funds are still in my wallet, and I can move them. That’s downright awesome. Staking will be applied from the next epoch. The reward will begin to accrue from the 3rd epoch after staking. This means that it’s gonna take a minute before you start to earn rewards. You’ll see later in this story that the wallet view will show “round” information, which I believe represents these epochs.
Because it wouldn’t make sense to do anything less, the deposit amount defaults to the maximum and is read-only. Go ahead and click Next.
You’re presented with a confirmation screen. Note that I have to pay a network fee, so for small amounts — like the $50 I’m working with — it may not make sense. That’s 5%; it will take a full year of staking to earn that back! But, we’re in it for the science, right? So, onward we go. Click the Confirm button.
That’s it — done! The Staking link below your balance in the wallet list will now show additional details. Recall that in the staking details noted above, rewards will begin to accrue in the 3rd epoch after staking, and the epochs are about 5 days each.
Conclusion
Guarda makes staking Cardano and a handful of other tokens really easy. You maintain control of your tokens while you stake, and you begin earning rewards for many of them instantly. Cardano takes a few rounds before you start earning, but the process is completely painless.
Cardano is just starting to take off. It’s expected to launch support for smart contracts soon with its Goguen release, and many, many projects are being developed. There’s so much excitement for Cardano, and it will most certainly see a lot of growth in the future — so it’s a great token to hold onto for the long run. And, if you’re going to hang onto it, you might as well stake it and earn the additional rewards.
As a final note, I’m not affiliated with Guarda in any way. I first used it to stake Harmony ONE tokens and later staked Cosmos ATOM tokens, too. I’ve had great experiences with Guarda and will certainly move other tokens there for staking in the future.
This story was originally published on This Crypto Life on March 25, 2021.
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