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One way to earn passive income with Cardano is by staking ADA in a non-custodial wallet like NuFi.


Staking ADA is a low-risk, low-effort way to earn ADA rewards while you sleep, while also helping the blockchain to remain decentralized and secure. But what exactly does that mean, and how does it work?


In this article:

What Is Cardano Staking?


Staking means using your ADA's intrinsic voting power to support the security and operations of Cardano blockchain. In a nutshell, it's how Cardano remains decentralized.

  • While staked, the ADA in your wallet can be used by the blockchain to 'vote' when the blockchain needs to make a decision.
  • For example, when verifying new transactions and deciding if they should be included in the next block.
  • By voting, staked ADA helps the Cardano blockchain to reach a consensus without giving authority to a single entity.
  • As a thank you for staking (and helping the blockchain run in a secure and decentralized way), you earn rewards in the form of additional ADA tokens paid directly into your stake account by the blockchain itself.



Good to know:

  • This type of consensus mechanism is called Proof-of-Stake, and Staking is the action that Cardano users do in order to make their ADA available to the blockchain to use.
  • The more ADA that's staked, the broader or more independent the consensus is, and the more resilient to attacks the blockchain is.

How Does Cardano Staking Work?


When you stake ADA, you delegate your tokens to a stake pool (validator) who uses your ADA's voting power on your behalf. This is a one-click process that you do inside your wallet and it's the only action you need to do to begin staking.


What does a validator do?


A validator (or stake pool) is responsible for processing transactions. The blockchain selects a validator to mint (or forge) each new block, and then rewards the validator for doing so. The validator shares these ADA rewards with the people who delegated to them.


Certain factors increase a validator's chances of being selected, including a higher amount of ADA delegated to it, high performance and availability, and a good track record.



When you stake Cardano via NuFi wallet:

  • Your staked ADA never leaves your wallet and you retain full ownership
  • Your staked ADA is never locked or frozen, and can be spent or transferred anytime
  • Your staking rewards are re-staked automatically
  • You can choose the validator you want to stake to
  • You can have multiple stake accounts
  • There's no minimum staking period
  • You get same-day customer support via email, X and Discord

Cardano Staking Schedule & ADA Staking Rewards


Epochs: Cardano operates in cycles called “epochs,” which last 5 days each.


Rewards Schedule: it takes 15-20 days (3-4 epochs) to receive your first staking rewards; after that, you'll receive staking rewards every epoch (5 days), paid directly into your stake account.


Important: The ADA staking rewards you receive are automatically staked.


Rewards Amount: How many ADA staking rewards you receive depends on how much ADA you stake, the validator’s performance, and any commission fees charged. Typical APR for Cardano staking is approximately 3-4%.


Unstaking or Withdrawing Rewards: Staked ADA is not locked or frozen, and as such there is no unstake function; you can spend or transfer staked ADA without needing to do any action first.


Earned staking rewards are not locked or frozen either; however, earned rewards need to be withdrawn from the stake account to the available balance before they can be spent or transferred. The withdrawal is immediate, and requires you to pay a transaction fee.

FAQs


Q: Is staking safe?

A: Yes, staking is relatively safe. Staked ADA never leaves your wallet and you don't ever transfer control. Choosing a reliable validator is important to avoid high fees or potential slashing (penalties for validators behaving dishonestly).


2. Can I still use my ADA while staked?

Yes, staked ADA is not locked or frozen: it remains available and usable even while staked.


3. How much can I earn from staking?

The annual yield varies but is typically around 3-4% per year minus validator fees.


4. How do I start staking? You can stake ADA inside your NuFi wallet from the Staking dashboard.