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Cardano FAQs

What is Cardano's inflation and reward rate?

The expected reward rate for delegating ADA is 4.6083% per annum as of September, 2021.

Cardano’s initial token supply was 31.1 billion ADA, with an expected 7% annual inflation rate leading up to a maximum supply of 45 billion ADA. As of January 2022, the circulating supply of ADA is 33.51 billion ADA.

What is the minimum stake to delegate?

The Cardano protocol requires a minimum of 10 ADA to be in one’s wallet in order to be eligible for delegation. However, there is no minimum stake that one must delegate to an individual stake pool.

Why is the unbonding period variable?

Cardano does not have an unbonding period. However, due to the protocol’s snapshot system, unbonding will not be recognized by the protocol until the end of the epoch during which the user unbonds. Each epoch lasts approximately 5 days.

As such, if a delegator were to unbond moments before an epoch ended, their unbonding would be recognized by the protocol in 0 days, whereas, if a delegator were to unbond moments after an epoch began, their unbonding would not be recognized by the protocol for 5 days — until the next epoch begins.

What is the warm-up period?

There is a two epoch delay before a user’s delegation becomes active in Cardano, during which time the delegation is not eligible to earn rewards. The first rewards are then distributed another two epochs following the end of the warm up period.

One epoch lasts approximately 5 days; as such, from the time of delegation, there is approximately 10 days before one’s delegation is eligible to earn rewards, and another 10 days before those rewards are distributed.

What are the risks associated with delegating/staking?

There is no slashing within the Cardano protocol. However, while there is no eventuality that a penalty will be withdrawn from a token holder’s initial balance, stake pools can experience a decrease in potential rewards earned. The most common scenarios for decreased rewards include:

  • Missing blocks: The more block production a stake pool misses, the lower the reward rate will be for the stake pool that epoch.
  • Lack of pledged ADA: A stake pool at its stake cap with no ADA pledged earns only 77% of the rewards that a stake pool composed of 100% pledged ADA earns.

How does Coinbase Cloud's service fee work?

Coinbase Cloud charges a percentage service fee on all rewards earned by tokens delegated to our stake pool. The service fee is paid to Coinbase Cloud automatically by the protocol. You can withdraw your rewards from the protocol directly.

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