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The Cardano Delegation Cycle for Beginners

Updated: Nov 29, 2021


11/27/21


This information was taken from Tim Harrison, who is the Marketing and Communications Team Director for the IOHK Team (see https://forum.cardano.org/t/the-shelley-hard-fork-all-you-need-to-know/36553 for more information).


Figure 1. Cardano Delegation Cycle. Taken from https://forum.cardano.org/t/the-shelley-hard-fork-all-you-need-to-know/36553.



Initial Delegation

Whenever you decide to delegate your ADA to a stake pool, it will not immediately begin to receive rewards (see Figure 1). Delegated ADA will be 'active' two epochs after the epoch at which the ADA was initially delegated to the stake pool. For example, if an ADA holder decided to stake their ADA in Epoch 0, rewards for that staked ADA would not be eligible to accrue until Epoch 2.


Rewards Distribution

Following this example, if a stake pool has a large amount of ADA delegated (>3,000,000 - 5,000,000 ADA), it is very likely the stake pool will mint a block in Epoch 2. However, the rewards are not immediately paid out at the end of Epoch 2. Instead, it takes another two epochs for rewards to be paid out to delegators. Therefore, the rewards would be calculated in Epoch 3 and paid out at the beginning of Epoch 4.


What if the Stake Pool Doesn't Mint Blocks Every Epoch?

This same general principle described above applies! Following the above example, if a delegator delegated their ADA at Epoch 0 and the stake pool didn't mint a block until Epoch 5, rewards would be distributed in Epoch 7. See Figure 2 below for a generalized graphic of what this process would look like.


Figure 2. Generalized ADA Delegation Cycle for Stakers. If a delegator stakes their ADA in Epoch X, it will be 'active' in Epoch X+2. Once the stake pool mints their block in Epoch Y, rewards will be paid out in Epoch Y+2.



If you would like more information, RJCOIN at ADA HEART Pool created and kindly provided The Grand Ultimate Cardano Staking Guide, a high quality pdf available in multiple languages that explains staking and the delegation cycle (see below).



If you are interested in downloading this guide in another language, feel free to download them here:

https://www.reddit.com/r/cardano/comments/q436xr/the_grand_ultimate_cardano_staking_guide_9/?utm_medium=android_app&utm_source=share



References

[1] https://forum.cardano.org/t/the-shelley-hard-fork-all-you-need-to-know/36553

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