- 1 While Cardano’s price ranged sideways, more than 100,000 new addresses have started staking with Cardano (ADA) in the last two months.
While Cardano’s price ranged sideways, more than 100,000 new addresses have started staking with Cardano (ADA) in the last two months.
Cardano records 100000 new staking wallets in two months.. According to information from Pooltool, the Cardano network data aggregator, the number of wallets staking with the ADA token surpassed 942,000. Two months ago, the number of addresses performing this activity was 821,000.
Cardano focuses more and more on staking
Also, thanks to the data aggregator, more than 70% of the current supply of more than 32 billion Cardano tokens are distributed across nearly 3,000 active pools, totaling more than $54 billion in staking.
These numbers reinforce Graph Blockchain’s vision. In May this year, they highlighted that the Proof-of-Stake (PoS) mechanism inserted in the cryptocurrency network would be one of its main assets, making it attractive to users and investors.
Moreover, the insertion of Smart Contracts brought with the Alonzo update has increasingly stimulated the creation of new protocols on the Cardano blockchain, which already has projects targeting decentralized exchanges and NFTs.
Not surprisingly, the ADA token network reached the milestone of more than 2 million wallets earlier this month:
?OVER 2 MILLION ADA WALLETS?️— Cardano Community (@Cardano) November 1, 2021
It wasn’t long ago that we were celebrating hitting our 1 million mark and now we hit a whopping 2 million #ada wallets!#Cardano #CardanoCommunity@F_Gregaard @IOHK_Charles @IOHKMedia @InputOutputHK pic.twitter.com/x40pri9tjN
What is crypto staking?
Staked cryptocurrencies are coins you can stake on a PoS blockchain. Proof of Stake is a consensus mechanism behind the blockchain, similar to Bitcoin’s Proof of Work, that ensures it works correctly.
Staking cryptocurrencies gives holders decision-making power in the network, allowing them to vote on governance decisions and generate revenue from their assets.
How does cryptocurrency staking work?
Cryptocurrency staking works by “staking” a coin on a PoS network by storing crypto in a native wallet. You also stake cryptocurrencies into a Smart Contract to operate validator and block-generating nodes.
The coins help validate transactions, operate nodes, and maintain the health of the blockchain. Then, rewards are earned based on the number of coins you contribute to the staking platform.
Benefits of staking Cardano
Staking ADA is an excellent way to earn interest in your cryptocurrency holdings. Two great benefits to Cardano staking are passive income and network decentralization. The process will lock your crypto for a certain period.
People holding ADA can earn passive income by delegating ADA to a Stake Pool or operating their Staking Pool. If you have lots of ADA and possess the skills to launch a Pool, consider doing so. Creating a private interest pool and not sharing the rewards with others would make sense.
People with smaller amounts can also earn a passive income in Cardano by staking their funds to a public staking pool, which generally retains a fee from the reward received by the staking pool.
What are the drawbacks of ADA staking?
Unlike other PoS blockchains, Cardano has no real drawbacks for staking ADA. But you should know how and where to do Cardano staking. Doing Cardano staking translates to blocking the staking in a staking pool for a certain period. That means that you cannot use your coins while they are staking.
Using Daedalus or Yoroi wallets for Cardano staking, your funds will remain in your wallet. You do not make any fund transfers to the staking pool. Staking ADA is a way to get interested in owning cryptocurrencies, but there are some things to consider.
Saturated Stake Pools
The whole point of staking Cardano and having multiple staking pools worldwide is decentralizing the network. Only one Stake Pool to which everyone wants to send their staking would compromise that principle. That is why there is a delegation criterion, after which a Pool cannot receive higher rewards for more delegations. The network will severely reduce its rewards if a Stake Pool gets saturated.
Delegating to a near-saturation Stake Pool sounds optimal, but saturation is possible, which will decrease rewards. Stake Pool saturation is one of the relevant criteria when choosing a staking pool. It would be ideal for staking Cardano in a pool with 70% saturation.
Staking pool rates
Delegating your staking to a public pool will incur a fee deducted from the reward. It would help if you considered that the Pool Operator managing that Stake Pool has many costs to maintain that Pool, such as server maintenance, electricity, availability, and security. It is important to remember that Pool software will withhold the fee from the rewards before distributing it to the delegators.
What’s going on with the Cardano price?
Expectations regarding the Alonzo update culminated in a strong bullish move, causing ADA to hit a new all-time high of $3.09 in early September.
However, the token has been in a strong downtrend, losing 40% of its value. Even with Bitcoin (BTC) and Ethereum (ETH) hitting new record high prices this week, ADA has accumulated a modest 2% gain over the past seven days, trading near $2.
Although it does not achieve great valuations, trading above the $2 area is a good sign, as this range is a firm price support level. Moreover, a potential altseason could propel several altcoins to chase new all-time highs, including ADA. The token must cross the $2.33 area for its trend to be considered bullish.