Q: What is the benefit of staking and why do I get rewards for doing so?

 

A: Staking helps to secure the Cardano network. Through staking, ADA holders are taking their ADA out of circulation making it difficult for any adversary to acquire 51% of the total supply of ADA. As long as 50% or more of the total ADA is unavailable to an adversary the network is secured from adversarial control. Stakers are rewarded for this by receiving rewards every epoch.

 

Q: When do I start receiving rewards?

 

A: It takes 16 to 20 days (minimum of 3 epochs) before you start receiving rewards. After that they arrive every 5 days. Here's how the schedule works:

*****(Insert image of stake schedule)

Stake snapshots occur at the beginning of each 5-day epoch. If you delegate your stake in the middle of an epoch (let's call it Epoch 0), your stake is not registered until the beginning of the next epoch (Epoch 1).  At this time your wallet and stake gets registered on the Cardano Blockchain and a reward address is also created. Depending on which day in Epoch 0 you start your staking, it could be 1 to 5 days before your stake is registered. At the start of the next Epoch (Epoch 2) your delegation becomes active and you start earning rewards. At the start of Epoch 3, your rewards for Epoch 2 are calculated and at the start of Epoch 4 your rewards for Epoch 2 are delivered to your rewards account.

 

This process continues providing rewards every epoch (5 days) until you withdraw your funds from your wallet. Note that rewards are always 2 Epochs behind so even if you re-delegate to another stake pool you will continue to receive rewards from the old pool for 2 more epochs. 

 

Q: When I switch pools will I lose out on any rewards?

 

A: No, no rewards are lost when you switch pools. When you move your ADA between pools you’ll continue to earn rewards from your current pool for 2 more epochs, after that you’ll simply start to earn rewards from your new pool.

 

Q: Does additional ADA that I add to my wallet get staked automatically?

 

A: Yes, all ADA in your wallet is automatically added to your chosen stake pool. Furthermore, just like your original stake, there is a delay before you start earning rewards on the additional ADA.

 

Q: Do I have to move my rewards from my reward address to my original address to stake them?

 

A: No, all ADA in your wallet, including the ADA in your reward address is automatically added to your total stake and thus staking rewards compound without any action required from you. You only need to move your rewards when you want to use them.

 

Q: What does it cost to stake?

 

A: Only a very small initial registration fee. There is a 2 ADA deposit that is required to start staking, however that deposit is returned when you stop staking. Registering your wallet is a transaction on the blockchain so you will be charged a one-time transaction fee of approximately 0.17 ADA.

 

Q: What is the difference between the fixed pool fee and variable pool fee?

 

A: Currently, all pool operators are required to collect a mandatory, fixed pool fee of 340 ADA per epoch. On top of this, they are also free to add whatever variable fee they choose. ZPCT's variable fee is 0% and always will be. The 340 ADA fixed pool fee isn’t charged to individual stakers, rather it’s automatically deducted from the pool’s total rewards first and then the remaining rewards are distributed to all delegators in the pool based on the amount of ADA they stake.

 

Q: What returns can I expect?

 

A: Returns average approximately 5% per year. They can fluctuate significantly from epoch to epoch but average out to 5% over time. Smaller pools will have greater variability in rewards and even have epochs with zero blocks (and therefore zero rewards) while larger pools will have a more even distribution in block production and rewards.

 

Q: Are returns the same for every pool?

 

A: Over time all pools will gravitate toward the 5% range and all pool operators are required to charge a 340 ADA fixed fee minimum. Pool operators are free to charge higher fixed and variable fees if they wish. ZPCT pool’s fees will always be 340 fixed and 0% variable. Other pools have larger fixed and variable fees from 0% all the way up to 100%, which seriously diminishes your rewards!

 

Q: Can a pool’s fees change?

 

A: Yes, unfortunately some greedy pool operators quietly increase their fees after attracting delegated stake. If you’re not regularly checking for this, you may end up losing out on a large portion of your rewards. ZPCT pool is strongly opposed to this behaviour and is committed to providing you 0% fees FOREVER!