Staking 101


If you’re new to staking you’ll no doubt have a few questions.

Hopefully, like me, you’ll find staking within Cardano extremely easy and safe.

  • The ADA you stake never leaves your control (it is always in your wallet)
  • There are no lockup periods (your funds are always available to you)
  • Rewards are payed automatically to your wallet
  • Rewards always compound within your wallet

Should you want to read more from the source:

Or, try out their rewards calculator:

What is Delegation?

Delegation is the actual term used for what most people will refer to as “staking”. It is the process where you tell the network which Stake Pool you have chosen to support. The more ADA that a pool has delegated to it the larger the odds the Stake Pool will mint blocks on the chain during an EPOCH.

What is an EPOCH?

An EPOCH (typically pronounced “epic”) is a 5 day period where blocks are minted. During this 5 day period all the pools that have won the minting lottery will produce blocks. At the end of the 5 days all the rewards generated by the pools are automatically distributed by the network to the pool delegators. The process then repeats for the next epoch.

How do rewards work?

At the end of every epoch the pool receives an amount of ADA that is determined by the network protocol. All the delegators who have staked with a pool that created at-least 1 block receives a percentage of the pools rewards (after pool fees).

Rewards are delayed a few epochs when you first delegate to a stake pool. It takes 2-3 epochs before any rewards will start being deposited to your wallet. After this initially delay, rewards are deposited at the end of after every epoch (based upon the rewards the pool received from the network for minting blocks)

Did you say fees?

Every pool can set fees to support the pool operator(s) for their work. The fees collected help pay the very real bills the pool operators face to maintain machines running 24/7 on the internet.

  • Pool Operator – Fixed Fee
    • Pool operators receive a fixed fee for operating a pool.
    • This fee is only paid once during the epoch ( if a block was created)
    • (see example below)
  • Pool Operator – Margin
    • Pool operates can set a fee on top of the fixed fee.
    • This fee is only paid once during the epoch (if a block was created)
    • (see example below)

Operator fees?? What does this mean??

Let’s do a little back of the napkin math:

The rewards shared across the pool delegators end up being this equation:

(PoolRewards - FixedFees) * ( 1.0 - MarginFee)

Let’s say the pool has minted enough blocks during the epoch that the network has rewarded the pool with 10000 Ada

TavernCrypto has set the fees as:

  • 340 – Fixed Fee (This is also the very minimum the network allows)
  • 0.5% – Margin

The following math occurs:

(10000 - 340) * (1.0 - 0.005) = 9611.7

The 9611.7 Ada are distributed to each delegator proportionally based upon the amounts they have staked in the pool for the epoch.

As an opposite example, Let’s say the pool has failed to mint any blocks during an epoch

The following math occurs:


There are no rewards for the delegators (and also no pool operator fees). The result is then zero Ada is available to be distributed.

Last point to state, there is a one-time-deposit that the network charges whenever you setup a new wallet for staking. The Cardano network has a 2 Ada (plus transaction fee) deposit that is required to setup your personal wallet address. This isn’t associate with any pool or pool operator. Pools never see this deposit or have access to it.

What pool should I choose?

Well, I hope the answer will be TavernCrypto, but the final choice is up to you.

You’ll want to ask:

  • What are the Fee amounts (they should be reasonable and as minimal as possible for you)
  • How much Ada has been delegated (be sure the pool is not saturated as that impacts your rewards)
  • Does the pool have a good track being online?
  • Does the pool have a good track of minting blocks?
  • Has a reasonable amount of Ada been pledged by the pool operator?

Here are a few websites that can help you find out these details for any pool on Cardano including us:

Look for TavernCrypto under the ticker TVRN and I hope you’ll choose to delegate with us.1