Updated: Sep 4, 2020
Last night's epoch change was supposed to be the first epoch of the main net where the very first blocks were going to be minted by part of the decentralised network - stake pools. Unfortunately, few hicks ups creeped in along the way.
This has resulted in IOG's CEO, Charles Hoskinson, to delay block minting period by another epoch. Thus, if everything goes as planned, in less than 5 days we could finally celebrate first Cardano block minted by an independent stake pool provider.
With all these changes, below you can find a very easy formula to be able to figure rewards timing on your own in the future. Plus, you will be able to explain it to your friends and family, too.
First things first. In order to start staking, you need to delegate your ADA to a stake pool of your choice. In order to stake your ADA, you need to be able to have a Cardano wallet that enables staking. Once you have registered your wallet to the pool of your choice, that address stays firmly in place until you change it otherwise.
For the first time, you have to set the expectations right. If you delegate ADA for the first time today, it will take an extended period of time for the first rewards to arrive. Let's dive right into it.
Tell me more about these epochs.
Key metric to understand in terms of staking timeline is the epoch length. One epoch lasts about 5 days each. This is important, because epoch is essentially a work day at the network. And every epoch change is start of a new working shift. You will hear people talking about network taking snapshots at these shift changing moments. The network essentially takes an inventory of the entire staking ecosystem to determine who had when and what amount of delegated ADA. This allows the network to determine rewards mechanism outcome.
Maybe you ask - how do I know when the next epoch starts or the current one ends?
Good questions. If you are familiar with Daedalus wallet - it will show up in your delegation center. It will show you exactly what slot height we are at, which epoch and also how much till the next one. However, this can take time to load and sync. So what if you wanted to check that on the fly?
You can figure it out by visiting number of 3rd party network monitoring sites. Presently, not all of them let you easily see how much time is left till the end of the current epoch. Pooltool.io will show you number of hours remaining. Need to do quick math on how many days that is. If you visit cardanoscan.io - you can then see when exactly current epoch ends. You can also download Pegasus app or use adapools.org website too. You have choices.
So why is this timing important in the first place?
There is a key rule that governs all the changes on the network. Any changes made today will be confirmed only when the current epoch and the next epoch following elapse. Since every epoch takes about 5 days, if you just missed an epoch change - it can take up to 10 days for your changes to be confirmed. Or as little as just barely above 5 days if epoch change is imminent.
Therefore, if you create a brand new wallet and load it with ADA today, you will need to wait for this wallet to be registered on the network first. This requires patience. However, don't beat yourself too much about it. On a macro level, any losses during the time frame when you couldn't stake while waiting for the registration to complete are minimal. Cardano is not a get rich quick ponzi scheme. It is an investment into your future selves.
When will I be able to claim first rewards?
Okay, bear with us. This gets little fuzzy at first but once you get it - you'll be a pro.
If you registered your wallet for the first time today, as mentioned above, you will need to wait for the current and the next epoch to elapse. Until then - nothing happens and your wallet is un-delegated for the entire wait period. Once the next epoch ends, the network will include your ADA in the snapshot and registers your stake for the first time officially.
You with us still? No rewards just quite yet.
Then, we wait until that registration epoch ends, 5 days elapse. Your ADA still doesn't work though yet. Only when this epoch ends, your ADA will now be officially at work for the following epoch. After your ADA has worked for these 5 days - an epoch - another change of epoch happens. This epoch is used to calculate your rewards that you've earned from previous term. Once this epoch is finally over - at the epoch change - your rewards will show up in your account - at last. And the cycle repeats. To simplify:
Epoch -1 - your wallet is delegated to a pool of your choice
Epoch 0 - waiting 'lobby' before official registration
Epoch 1 - ADA is registered on the network officially
Epoch 2 - ADA is hard at work on the network
Epoch 3 - network calculates your rewards based on the work epoch prior
Epoch 4 - network awards you with rewards for work during Epoch 2
Epoch 5 - network awards you with rewards for work during Epoch 3
If you will be keeping your ADA on your staked wallet, rewards will then keep rolling on a 5 day basis every time. It takes a long time to get your first rewards the first time around but then they keep adding regularly.
Do I need to claim these rewards somehow?
Once these rewards are awarded to you - they will be added to your wallet automatically. You don't have to claim or do anything else in order to be able to claim them. What more, these new ADA is then added to your original staking amount and it becomes a compound interest of sorts. How cool is that? Unfortunately, you cannot split the rewards into a separate wallet at the moment. All will be credited to that one delegated wallet for that particular pool.
Can I add more ADA later on? Can I remove ADA, too?
Once your wallet address is fully registered as delegated - you no longer have to wait as long as during the first cycle. All you need to do is to add more ADA to the same address and at the next epoch change this new balance is put to work and joins your 'old' ada balance. The same applies in the opposite direction.
If you decide that you need your ADA today, you can simply create a new wallet and move your all or partial ADA to that new wallet. If this new wallet hasn't been registered as delegated, your ADA is now free from delegation. There is absolutely no lock on your staking or any other requirements preventing you from being able to use your funds at a moment's notice. And that's how it should be.
Let's say you find a pool that fits your ethos and goals better than the current one and wish to re-delegate. You can choose to un-delegate from the current pool to another pool of your choice at any time. However, these changes will need to go through the long cycle above - waiting for the changes to be confirmed after current and next epoch elapse. Everything else - remains the same.
So what happens if I change my delegation/re-delegate.
If you use re-delegation function (e.g. Daedalus), the network will take notice of these changes just like when you registered your ADA wallet for the first time. For this entire time - your wallet will indicate pending re-delegation. Hence, until such time, you will keep receiving rewards from your old pool until time cycle explored above catches up with the new pool giving out rewards. This all takes into account that pool is already producing blocks each epoch on all ends. Process is seamless if you do it on the same day.
Can I stake with one wallet address to multiple pools?
Currently, there is no way to use one wallet and split your stake into several staking pools. If you wish to do that you will need to, as cumbersome as it sounds, to create multiple wallets and register them with that pool separately. Good news is that there are plans in the future to enable this feature. But not just yet. Check the date stamp of this article to see if there haven't been new features introduced already.
I heard there are fees to changes, right?
In an essence, yes. Every change requires some sort of transaction to take place on the network in order to be processed. That requires a small transaction fee. This generally, as of today, is less than 1 ADA to perform.
Before you forget about it all after you have delegated your ADA, make sure to back up your access codes to your wallets. Staking is generally a long term endeavour and you don't know what happens to your computer, phone or other devices where your wallet is. By having safely backed-up your recovery codes - you'll be able to access your funds in the future with ease of mind.
In the end, make sure to come back and visit your wallet to see if rewards are coming your way as promised or envisioned. Stay in touch with your pool operator on their recommended forums to see for updates and to stay in a know. Network is still evolving and there are more updates coming in the coming months that can affect your stake.
To conclude, remember this.
In the early days of Shelley launch - many pools will not be minting large (or any) amounts of blocks just yet. That is because network is still in the process of decentralisation. On the first minting block epoch - 210 - only 10% of blocks are going to be minted by the stake pool operators. Over time - this should reach 100%. However, current expected rate of decentralisation is about 0.025% per epoch. At this pace, it will take just under 200 days for the network to be validated by stake pool operators entirely.
Keep that in mind to curtail your own expectations and time horizon of your holdings. Patience is key here.
Happy staking. Undecided about your pool yet? We invite you to consider staking with us. We are small community pool that would welcome you. Reach out to us on telegram link in the footer of the page. We will be funding cool projects together from rewards that go to the operator via CF Foundation arm.
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