Delegate
On this page an explanation on the Cardano Stake Pool Parameters and on how to delegate your ADA are given.
Stake Pool Parameters
Two parameters which can be set by the Stake Pool Operator are Pool Cost and Pool Margin. The Pool Cost represents the costs the Stake Pool Operator makes for operating the Stake Pool. The Pool Margin is a percentage of the rewards, which the Stake Pool Operator grants himself/herself as income. There has been confusion about these two parameters since the beginning. Therefore here a brief description on how it works:
Each Cardano epoch (5 days) the Stake Pool receives rewards based upon the total amount of stake delegated to the Stake Pool. Let's take the example of a Stake Pool receiving 10,000 ADA in a particular epoch, having set the Pool Cost to 170 ADA and the Pool Margin to 1%. First the 170 ADA are subtracted from the 10,000 ADA, which leaves 9,830 ADA. From these 9,830 ADA another 98.3 ADA (1%) is subtracted, which leaves 9,731.7 ADA. These 9,731.7 ADA are distributed to the delegators relatively to the amount of ADA they delegated to the Stake Pool. The Stake Pool Operator receives 170 + 98.3 = 268.3 ADA.
Delegating ADA
From your trusted and preferably non-custodial wallet, select a wallet to delegate and a Stake Pool to which you want to delegate the wallet to. In many wallets you can select the ticker of the Stake Pool. For the Stake Pool of Smit Blockchain Operations that ticker is BKIND. In other wallets you need to supply the pool id in bech32 or in hex. The id of BKIND in bech32 is pool1m83drqwlugdt9jn7jkz8hx3pne53acfkd539d9cj8yr92dr4k9y and the id in hex is d9e2d181dfe21ab2ca7e95847b9a219e691ee1366d22569712390655.
After you have chosen the Stake Pool to delegate to, you will need to submit a transaction which requires your wallet password. When you delegate a Cardano wallet for the first time, 2 ADA will be taken from your wallet as a staking deposit. This is a one time deposit for that particular wallet. When you decide to stop staking, the 2 ADA will be refund. For each delegation or delegation switch you do, you pay a small transaction fee to the blockchain.
When you start delegating it will take current epoch plus one full epoch before your delegation becomes active in the Stake Pool. In the epoch after this first active epoch the rewards are calculated, so you will receive the first rewards after 3 full epoch. From that epoch onward you will receive rewards each epoch (assuming that the Stake Pool makes at least one block each epoch). When you switch Stake Pools, your delegation to the current Stake Pool remains active until it becomes active in the new Stake Pool. A lot more can be explained about the rewards mechanism of Cardano. In case you need more information, you are welcome to reach out. See Contact page.
