How Balance and Stake work within the Cardano SL

There are two important concepts within the Cardano SL: these are balance and stake. This chapter explains the difference between these two concepts and how they both function.


Balance is the real amount of coins that each user has. When you install a Daedalus wallet on your computer and perform the Ada redemption process, you receive an amount of Ada. This amount of Ada is called your balance. You can send an amount of Ada (within this balance), to other users, as well as receive any amount of Ada from other users.

Thus, when we refer to the balance, we are talking about the user’s actual money.


Unlike balance (the real amount of money you have), stake is a key element of the entire financial power of Cardano SL. Stake gives a user the power to control various Cardano SL algorithm parts, for example: being the slot leader, voting in the Update system, taking part in MPC/SSC. This is why all thresholds in the Cardano SL protocol are expressed in terms of stake, rather than balance.

Thus, when we refer to the stake, we are talking about the user’s ability to control the actual Cardano SL. For more information about stake, please refer to the following paper.

The Relationship Between Balance and Stake

Every coin in Cardano SL is associated with a balance and with a stake. We use transaction output to associate coin C with a user’s balance, and we use stake distribution to associate coin C with a user’s stake.

Note: It is possible to change the association between coin and stake using what is known as stake delegation.