A Quick Introduction to Staking

Many of you are likely familiar with the concept of “mining” in relation to Bitcoin and Ethereum. Mining is essential for these proof-of-work (PoW) blockchains, which rely heavily on computational power to validate transactions. However, PoW has its drawbacks; it is often criticized for being slow and costly due to high computing fees.

To address these issues, Ethereum 2.0 is transitioning from a proof-of-work model to proof-of-stake, paving the way for more efficient networks. Among these, Cardano has generated significant buzz as a leading contender in the next-generation blockchain space.

In a proof-of-stake system, validators are randomly selected to confirm transactions, unlike miners who compete to solve complex problems. To become a validator, one must stake collateral. Instead of miners receiving rewards for discovering blocks, these rewards are granted to the chosen validators.

For those not interested in becoming validators themselves, you can delegate your tokens to a validator and share in the rewards. One of the simplest ways to do this is through a wallet provider like Guarda. This article will guide you on how to easily stake Cardano using Guarda's wallet.

This guide assumes you have a Guarda wallet and have already transferred ADA into it. Creating an account with Guarda is straightforward; simply visit guarda.com and follow the instructions. I acquired some ADA through CoinEx (note: referral link) and moved it to my Guarda wallet, but there are various options available.

Let’s dive into the staking process!

Getting Started with Staking

First, log into your Guarda wallet and navigate to your Cardano wallet. You should see your balance along with a Staking link beneath it.

When you click on the Staking link, a section will expand revealing staking options. Here, you can view and claim rewards, as well as stake or unstake your tokens. Click the Stake button to open a new Staking tab.

It's essential to read the details provided. The estimated yield is around 5%, which is quite favorable. Importantly, your funds will remain accessible and not locked away. You can still move your funds while staking, which is a significant advantage. Staking rewards will begin accumulating in the third epoch after you stake, so expect a short wait before you see returns. You'll notice information regarding "rounds" in your wallet, which corresponds to these epochs.

Moving on, the deposit amount will default to the maximum and is fixed. Simply click Next to proceed.

Next, a confirmation screen will appear. Keep in mind that a network fee is required, which can be significant for smaller amounts—like my $50 stake. It equates to 5%, meaning it could take a full year of staking to recoup that cost. However, we are in this for the long-term benefits, right? So, click the Confirm button to finalize the process.

And that's all there is to it! The Staking link under your wallet balance will now display additional information. Remember, rewards will start accruing in the third epoch after staking, with each epoch lasting roughly five days.

Conclusion

Guarda simplifies the staking process for Cardano and several other cryptocurrencies. You retain control of your tokens while earning rewards, many of which begin almost immediately. Although Cardano requires a few epochs before you start seeing earnings, the procedure is seamless.

Cardano is on the brink of major developments, including the anticipated launch of smart contract support with its Goguen update, sparking excitement and growth potential. Thus, it’s wise to hold onto Cardano for the long haul. And while you're at it, why not stake your tokens to reap additional rewards?

As a side note, I have no affiliation with Guarda. I initially used it for staking Harmony ONE tokens and later for Cosmos ATOM tokens, and I have consistently had positive experiences. I plan to use Guarda for staking other cryptocurrencies in the future.