Staking ADA is a great way to grow your portfolio or put some extra cash in your pocket.
Cardano (ADA -2.73%) is a smart-contracts platform powered by the ADA digital coin, and it's one of the more compelling projects in the blockchain industry. The developer team has moved very methodically in building the ecosystem, frequently publishing research in academic journals. In fact, the Cardano blockchain is secured by the first peer-reviewedconsensus protocol, Ouroboros.
The scientific rigor shown by the developer team has captured the attention of investors. There are over 3.4 million wallets registered on the Cardano blockchain, and ADA ranks as the seventh-most-valuable cryptocurrency. Better yet, smart-contract functionality went live last year, meaning developers can now build decentralized software and services on the platform. That could translate into significant price appreciation in the coming years.
In the meantime, Cardano bulls can earn passive income with ADA. Here's how.
Image source: Getty Images.
Earning passive income with ADA
Ouroboros is a proof-of-stake consensus protocol. That means you can stake ADA to participate in the network and generate passive income. In fact, there are two ways to earn rewards on the Cardano blockchain. You can either start your own stake pool or delegate to a stake pool run by someone else.
The first option pays more, but you need the time and technical know-how to operate and maintain a reliable server. That means buying hardware, installing software, and keeping the system connected to the network at all times. Fortunately, delegating your ADA to an existing stake pool is less complicated.
Cardano wallets like Daedalus or Yoroi allow users to delegate ADA, as do certain crypto exchanges. If you opt to delegate through a wallet, you will need to do some research. There are over 3,000 activestake pools, and it's important to choose one that will give you the best bang for your buck. That means you should compare metricslike the total stake in the pool, the blocks produced by the pool, and the contribution of the stake pool operator. Those variables impact how much passive income you earn, though the payout typicallyfalls between 3% and 6%annually.
Still too complicated? While most Cardano enthusiasts prefer to support smaller stake pools -- thereby keeping the network as decentralized as possible -- delegating through a crypto exchange is undoubtedly the easiest way to stake ADA.
Staking ADA through Coinbase
In March, Coinbase Global(COIN 5.68%) added support for ADA staking, and it only takes a few seconds to get started. Once you have ADA in your Coinbase account, tap the menu icon in the upper-left corner of the mobile app, then select "earn interest." Coinbase offers staking services for other cryptocurrencies as well, so you will have to choose Cardano and then opt in to the staking service. That's it.
ADA rewards will now show up in your account every five to seven days, after an initial holding period of up to 25 days. The current payout is a 2.6% annual percentage rate (APR). That's less than you'd earn through a wallet, but it's orders of magnitude more than the average savings account pays. Of course, cryptocurrencies like ADA are more volatile than fiat currencies, meaning your U.S. dollars are unlikely to lose significant value while sitting in a savings account.
However, if you're bullish on Cardano -- and there are plenty of reasons to be bullish -- staking ADA through Coinbase is an incredibly easy way to earn passive income.
Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Coinbase Global, Inc. The Motley Fool has a disclosure policy.
FAQs
Earn Passive Rewards with ADA Staking
By staking your ADA assets, you can receive up to 2.25% in passive income and watch your holdings grow by locking in your cryptocurrency for any length you want. How does it work?
What is the most profitable ADA staking? ›
Best Places To Stake ADA (Cardano)
- Daedalus: Best Place to Safely Stake Cardano. ...
- Yoroi: Best ADA Staking on Browser Extension. ...
- Binance: Best Place to Stake ADA (Cardano) for High Returns. ...
- Exodus Wallet: Best ADA Staking Several Coins. ...
- Kraken Exchange: Best Cardano Staking Pool for Beginners.
For Cardano to reach $US100, its market capitalisation would need to be around $US3. 5 trillion (which is $100 multiplied by its circulating supply of 35,045,020,830 ADA). For context, the total market capitalisation of all cryptocurrencies combined was $US2. 5 trillion as of March 21, 2024.
How to earn money on Cardano? ›
EARN REWARDS* BY STAKING YOUR CARDANO
Staking your Cardano allows you to passively earn rewards for helping to secure the network. Through the Yoroi wallet or AdaLite, and by pairing it with your Ledger hardware wallet, you can easily and securely delegate the Cardano you want to stake.
How much can I earn with Cardano? ›
This means that, on average, stakers of Cardano are earning about 2.00% if they hold an asset for 365 days. 24 hours ago the reward rate for Cardano was 2.01%. 30 days ago, the reward rate for Cardano was 1.99%. Today, the staking ratio, or the percentage of eligible tokens currently being staked, is 63.56%.
Why is Cardano not a good investment? ›
Like any investment, Cardano carries both risks and rewards, given the high volatility and susceptibility to market fluctuations.
What is the downside of staking Cardano? ›
Cons of Cardano Staking
While reputable pools exist, some pool operators may take advantage of contributors by claiming a significant portion of the rewards. Risk of Loss: While staking itself is safe, losing your funds is risky if you lose access to your wallet's private key.
What is the best return on Cardano staking? ›
Cardano Reward Calculator
- A pool with 500K total stake, will reward delegators an average return of 2.32% per annum.
- A pool with 2M total stake, will reward delegators an average return of 2.72% per annum.
- A pool with 5M total stake, will reward delegators an average return of 3.01% per annum.
Reaching $50 requires an 8,169% surge for the digital asset. Changelly's analysts believe ADA will reach this target just before 2040, as they have set a minimum target of $55.65 for January 2040. However, Telegaon has a maximum price of $45.87 for 2050, suggesting ADA might not reach $50 before 2050.
Therefore, we came up with a target of $6, which demonstrates the subjective nature of this projection. In conclusion, ADA has the potential to reach a new all-time high, but the $10 target is arbitrary and unsubstantiated.
How to earn Cardano for free? ›
Cardano $ADA airdrops involve the distribution of free tokens to existing cryptocurrency holders or users who complete specific tasks. These tasks can range from joining social media channels to interacting with decentralized applications (DApps).
What is the best Cardano staking pool? ›
Based on these factors, some of the best Cardano staking pools include Nexo, Kraken, Youhodler, eToro, Exodus Wallet, Coinbase KuCoin, OKX, BiTrue, ByBit, Binance, Huobi Global, and Crypto.com. Sign up for Coinbase and receive to $200 in crypto.
What is the best Cardano staking app? ›
Binance is a major crypto exchange that offers staking options for a plethora of cryptos, including ADA. It is considered the best Cardano staking platform by some for several reasons. Unlike a lot of options on this list that have a fixed Cardano staking APY, Binance offers several based on the staking period.
Does ADA Cardano have a future? ›
Cardano ADA Overview
According to our Cardano price prediction, ADA price is expected to have a -1.86% decrease and drop as low as by May 07, 2024. Our analysis of the technical indicators suggests that the current market feeling is Bearish Bearish 73%, with a Fear & Greed Index score of 69 (Greed).
Can ADA Cardano reach $100 dollars? ›
Even though we think that Cardano reaching $100 is highly unlikely, that doesn't mean that Cardano doesn't have the potential to increase in price. From a fundamental standpoint, Cardano still has a lot of upside potential since the project still has many key milestones ahead of it.
Does ADA Cardano have potential? ›
ADA is 79% down from its September 2021 all-time high (ATH) of $3.10. Our ADA price prediction forecasts an average price of $0.55 by the end of 2023. According to our 2025 Cardano price prediction, the price could break its ATH in 2025, and reach $3.50.
Is Cardano ADA taxed? ›
Yes. Cardano staking rewards are generally treated as income and subject to Income Tax upon receipt, based on the fair market value in your fiat currency. As well as this, if you later dispose of your ADA staking rewards by selling, swapping, or spending them, any profit may be subject to Capital Gains Tax.
