Cardano is a decentralized third-generation proof-of-stake blockchain platform and it’s native cryptocurrency is called ADA. While it shares characteristics and applications with other blockchain platforms, Cardano distinguishes itself from others through a commitment to peer-reviewed scientific research as building blocks for updates to its platform. It uses Ouroboros, a Proof-Of-Stake algorithm, to create blocks and validate transactions occurring on its blockchain.
Three organizations are responsible for Cardano’s development: IOHK, Cardano Foundation, and EMURGO. The first two are non-profit foundations and the third is a for-profit entity. The IOHK, which is responsible for building Cardano, works with a team of academics spread out across the world to produce research and review platform updates before implementation to ensure that they are scalable.
For more information visit Cardano’s official Website.
Staking is the process of actively participating in validating transactions on a Proof-of-Stake (PoS) blockchain. On Cardano’s blockchain, anyone holding ADA cryptocurrency can validate transactions by holding their funds in a cryptocurrency wallet and registering them in the network as being delegated to a Stake Pool. This will support the security and operation of the blockcahin, and make you receive rewards.
Cardano addresses have separate keys for spending and staking. This means that if ADA cryptocurrency holders decide to stake their funds, they will never leave their wallet. Furthermore, Cardano doesn’t require the funds to be locked in for a term, they can “un-staked at any time.
A Stake Pool is a group of cryptocurrency holders merging their funds to increase their chances of validating blocks and receiving rewards for this. These cryptocurrency holders, also called delegators, share the rewards proportionally to their contributions to the pool.
Cardano staking operates on a cyclical basis. Rewards are paid every epoch (an epoch is equivalent to five days). The rewards for an epoch are calculated during the epoch after the stake delegation has been used, and then distributed at the start of the epoch after that. The figure below represents an example where a ADA holder delegates during epoch 0. The Stake Pool will use the stake to produce blocks during epoch 2, rewards will be calculated during epoch 3, and the delegator will get rewards at the start of epoch 4. Please notice, there will be an initial delay before the delegator receives his/her first rewards. Afterwards, rewards will be received for every subsequent epoch (assuming the pools the delegator has delegated to produces blocks in every epoch)
Source: Cardano Forums
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