ASK Rocky

Some of our more frequent questions

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: 

Stake snapshots occur at the beginning of each 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 the day you stake, 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 redelegate to another stake pool you will continue to receive rewards from Rocky for 2 epochs.  

Q: So when I switch pools I won't lose out on rewards? 

A: That's right, no rewards are lost when you switch pools. When you move your delegation between pools you will continue to earn rewards from your current pool for 2 more epochs. After that you will start to earn rewards from your new pool. 

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

A: Yes, any additional ADA automatically gets added to your stake. Similar to your original stake, there is a delay before you start earning rewards on the additional ADA and a similar delay before those rewards start being paid.

Q: Do I have to withdraw my rewards to my original wallet to stake them?

A: No, rewards are automatically added to your total stake and thus compound without any action required from you. You do not need to claim your rewards until you want to use them.

Q: What does it cost to stake?

A: Only a transaction 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 transaction fee (approximately .17 ADA currently)

Q: How do rewards work and what is the difference between the fixed pool fee and variable pool fee?

A: Currently, all pool operators are required to collect a fixed pool fee of 340 ADA per epoch and are free to add whatever variable fee they choose. ROCKY's variable fee is 1%. Pool operator fees are not charged to individual stakers, rather the pool operator fees are automatically deducted from the total stake pool 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 can I expect for average returns?

A: Returns average approximately 5% per annum. They can fluctuate significantly from epoch to epoch but converge on 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 or do they vary by 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. Rocky's fees are 340 fixed and 1% variable. Other pools have larger fixed fees andvariable fees from 0% up to 6% or more. 

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