21ADA

Question 1

I'm not sure which Cardano wallet I can use to store my ADA.

Answer

The best wallet to use can be determined by a number of criteria as well as the individual requirements. A detailed wallet comparison between Daedalus & Yoroi can be found here: IOHK has produced the official Cardano wallet, Daedalus. This open-source wallet acts as a complete Cardano node on your server, meaning it keeps a full backup of the Cardano blockchain on your machine and can independently verify its legitimacy.
Daedalus is available for Windows, Mac OS X, and Linux. It will take a couple of hours for the app to sync up with the blockchain the first time it is opened since it keeps its own copy of the blockchain. This requires enough storage space on your computer. The automated redemption of staking rewards if transactions are submitted from your wallet is a function exclusive to Daedalus, saving you the processing fee needed to redeem the rewards manually. Daedalus also advocates Catalyst fund voting.

Pros: The only wallet solution that runs a complete blockchain node is Daedalus. The highest level of app wallet protection is available. Hardware wallets Ledger Nano (S/X) and Trezor Model T are supported. Cardano recovery seeds are used (i.e., can be simultaneously used with other wallets that support Cardano-formatted seeds) Stake delegation, governance (e.g., Catalyst voting), and multi-asset transfers are all fully supported. Staking prizes are claimed immediately. Cons: Several GB of hard drive space is needed. During activation, it takes a few hours to download the blockchain, and it takes a few minutes to synchronise new/restored wallets. Suitable for: PC users who want to run a complete Cardano node on their own device for increased protection. Emurgo produced the official Cardano wallet, Yoroi. This wallet is available as a browser extension or as a smartphone app. It doesn't need to synchronise with the blockchain or save it on your device because it isn't a full Cardano node. Although this allows you to get up and running more quickly, the wallet depends on the Emurgo server's honesty to verify transactions. The web application of Yoroi completely supports hardware wallets, including secret wallets, while the mobile version only supports the Ledger Nano X. Yoroi also accepts Catalyst fund voting. Yoroi also supports the Ergo blockchain in addition to Cardano.
Pros: Stores wallet details in a local account via browser extension (i.e., wallets don't have to be recovered any time you want to use them). Hardware wallets Ledger Nano (S/X) and Trezor Model T are supported (mobile version only supports Ledger Nano X) Cardano recovery seeds are used (i.e., can be simultaneously used with other wallets that support Cardano-formatted seeds) Stake delegation, governance (e.g., Catalyst voting), and multi-asset transfers are all fully supported. Cons: Syncing new/restored wallets takes a long time. Staking rewards must be claimed manually (requires paying a transaction fee each time) Suitable for: Web or smartphone users who also have an Ergo account and want easy access to their funds from the device(s) they use on a daily basis

Question 2

Is it possible for me to use several software wallets at once?

Answer

Well, absolutely! You may use different app wallets (e.g., Daedalus and Yoroi) to access the same ADA wallet address at the same time. You will do this by going to each application's "recover" menu and entering the recovery phrase you wrote down when you first created your ADA wallet.

Question 3

What are hardware wallets?

Answer

Two-factor authentication (“something that you have and something only you know”) is enforced by cryptocurrency hardware wallets to secure the funds. You authenticate a purchase with a spending password that you select by using a standard app wallet. An adversary will steal your funds if your password is exposed or if an adversary gains access to your computer. You must approve each transaction with a hardware wallet by entering a PIN on a physical device attached to your computer or mobile device. In this case, there is no chance of an adversary having remote access to your funds.

Public and private key pairs control all blockchain transactions. After demonstrating that they have access to a wallet's private key, a recipient is allowed to make a transaction. If someone else has their hands on this key, they will verify the wallet's transactions and obtain access to its funds. The private keys to your cryptocurrency wallets are stored in a hardware wallet, and these keys never leave your device, keeping them safe from prying eyes. You'll write down a recovery phrase as you set up the device, which you'll use to restore your wallets to another hardware device if your hardware wallet is missing or broken. This phrase can never be saved on a device that is attached to the Internet. Without having your PIN, even if anyone has physical access to your hardware wallet, they will be unable to access your funds. The hardware wallet will disable itself if the incorrect pin is entered too many times, and it will need to be retrieved using the recovery phrase. Some hardware wallets support secret wallets, which pair the PIN with a variety of passwords for added protection (not to be confused with the recovery phrase used to restore your hardware wallet). Each specific PIN + pass combination opens a separate wallet, and without knowing this, there's no way of knowing if this wallet exists at all. This feature increases protection while also providing plausible deniability. For eg, if you are forced to open your smartphone by an adversary, or if someone learns your recovery word, it is difficult to reach the funds in your secret wallets without even understanding the passcode.

Question 4

I'm not sure which hardware wallet to use.

Answer

When selecting a hardware wallet, make sure that the system supports the cryptocurrencies you want to store on it. The Trezor Model T and the Ledger Nano all endorse Cardano at the moment (S and X versions).

Overall, the Trezor Model T comes highly recommended. Its superior functionality to the Ledger Nano devices more than compensates for the higher cost. Using any hardware wallet, on the other hand, is much more secure than not using one at all. It is recommend to purchase a hardware wallet if your cryptocurrency investments are worth at least ten times the cost of the wallet.

Question 5

What is the concept of an epoch and how long does it last?

Answer

Cardano's accounting cycle is divided into epochs, each of which lasts 5 days. Staking rewards are received and paid out at the end of each epoch.

Question 6

What factors should I consider when selecting a stake pool?

Answer

When selecting a stake pool, several considerations must be considered, including pool efficiency and costs, respect for decentralisation and free communication, pool capacity, and so on.

Pages such as PoolTool & AdaPools will help you compare stake pools.

Question 7

When I delegate to a pool, will my ADA be locked?

Answer

No, you are free to spend your ADA whenever you want. You will stop earning staking rewards from anything you spend.

Question 8

Is it safe to stake my ADA? Is it possible to risk money by staking?

Answer

Your ADA is absolutely safe! Stake pools never have access to your assets or rewards, so you retain complete leverage of your staked funds. Furthermore, you will never risk funds by staking it.

Question 9

I staked my wallet and was charged 2.17 ADA. Why?

Answer

When you first delegate your wallet, you must pay a deposit of 2 ADA. When you undelegate your wallet, you will get your deposit back. To cover the conversion fee for registering your wallet for delegation, you were also charged 0.17 ADA. When you move funds on the Cardano blockchain, you must pay a transaction fee.

Question 10

What are the costs of joining a stake pool? What exactly do the terms "fixed fee" and "margin" mean?

Answer

Stake pools charge two forms of rates: fixed fees and margin fees (also called variable fee). The fixed fee is a percentage of the cumulative rewards produced by the pool in a given epoch (epochs last 5 days).
Pools are required to charge a monthly fixed fee of 340 ADA. This is not a cost that each delegator would pay. After the fixed fee has been deducted, the margin, or variable fee, is a percentage taken from the pool's overall rewards per epoch. These premiums go to the pool's owners to help them meet their operating expenses.

Prior to distributing rewards to delegators, pools exclude their payments from the overall rewards received by the pool. A pool does not charge any fees if it does not make any blocks. Delegators are not charged fees directly.

Question 11

What exactly is a "pledge" and why is it significant?

Answer

The sum of ADA that the pool operator(s) has staked in their own pool is known as the pledge. This directly communicates to delegators how invested the operators are in the pool's performance. Pledged ADA receives rewards in the same way as staked ADA does, but if a pool goes down, the operator will forfeit not just the fees for the missing blocks, but also the rewards for their pledge.

Question 12

Is it necessary for me to claim my rewards at the end of an epoch?

Answer

No, the staked balance is immediately updated with earned rewards. You only need to collect rewards when you want to withdraw them from your wallet.

Question 13

I staked my ADA but have yet to be rewarded. How long will it be before I get my first payment?

Answer

It takes 15 to 20 days for the first reward payout to arrive. Following that, you'll be paid per epoch (5 days).

Question 14

Do I have to re-stake ADA to earn rewards if I add it to my wallet?

Answer

No, when you stake your ADA, you are delegating your entire wallet, not just a portion of it. Your staked balance will be adjusted automatically if you add or withdraw funds.

Question 15

If I switch my staked ADA to another wallet, will I lose out on rewards?

Answer

No, but you should keep in mind where the rewards will be distributed.

Question 16

What is the maximum amount of ADA that can be staked in a single pool? What exactly does "pool saturation" imply, and how is it managed?

Answer

The cumulative amount of stake that can be used to earn rewards in a single stake pool is known as pool saturation. If a pool holds more than the permissible amount of stake, anyone delegating to the pool will receive lower rewards. The k parameter, which is currently set to 500, determines the saturation point. This means that the Cardano network is designed to accommodate 500 pools that are fully saturated. In fact, there will be many more than 500 pools in use, with the majority of them not being at saturation.

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