Cardano has been making headlines lately due to Shelley, which simply means decentralization. The excitement around Cardano decentralization is the fact that, it Cardano is a Proof-of-Stake blockchain, which means investors will be in a position to stake Cardano (ADA) and earn a passive income from it. It’s the case with all the other Proof-of-Stake blockchains. So how does one go about the process of staking ADA?
Well, for starters, there is no minimum for staking ADA. You can even choose to stake one Cardano (ADA). However, for it to make financial sense, you need to stake a huge amount of Cardano. That’s because, the more you stake, the more you are likely to earn. It’s just like any other business venture. Those with more capital tend to make a higher return on their money.
Cardano staking gets even better with the stake pools. Anyone has the freedom to start their own stake pool. The requirements are not that high. According to the IOHK, all one needs to run a stake pool is a good knowledge of Linux. Here is an excerpt from the IOHK Cardano FAQs page, on what one needs in order to run a stake pool.
“Server maintenance and devops/sysops experience will be a very big plus. Linux system administration skills.”
This means that once Cardano staking starts, there will be lots of pools staking ADA, and securing the network. The IOHK makes the entire staking process very easy and simple for anyone looking to get involved. The only thing that they don’t dwell on is the staking reward, and there is a good reason for it. If the Cardano team were to announce a specific stake reward, they would simply be lying to investors. Staking rewards are relative, and are heavily dependent on how the network performs.
If Cardano doesn’t get much adoption, then the rewards for staking it won’t be that high. On the other hand, if Cardano gains widespread adoption, then the network value will grow, and so will the staking rewards. In essence, for someone looking to stake Cardano (ADA), rewards shouldn’t be the end goal at this point. The goal at this point should be to get the network strong enough from attacks. This is what will drive confidence in Cardano (ADA) and push it to a level where it will draw in Dapps and drive up the network value.
In essence, anyone who loves Cardano (ADA) should be looking forward to staking it. Once this network gains traction in terms of adoption, its value could grow significantly, and surpass its 2017 highs. For anyone holding a couple hundred thousand Cardano, this could create a passive revenue stream that allows them to retire on Cardano. As such, the goal for any investor at this point should be to accumulate on Cardano before staking becomes a thing. Once it starts, Cardano could rise so fast that accumulating it will be almost impossible, at least a level where the staking rewards make sense.