Stake pools

A stake pool is a reliable server node that focuses on ledger maintenance and holds the combined resources, or stake of various stakeholders in a single entity. Stake pools are responsible for processing transactions that will be placed in the ledger, as well as producing new blocks, and are at the core of Ouroboros, the Cardano proof-of-stake protocol.

To be secure, Ouroboros requires a good number of stakeholders to be online and maintain sufficiently good network connectivity at any given time. This is why Ouroboros relies on stake pools, entities that are committed to run the protocol 24/7, on behalf of the contributing stakeholders that hold ada. The idea is that these resource holders can pool their resources, or stake, together and form a pool, where typically one holder is the operator of the pool and the rest are delegators. Typically, the stake pool operator installs and runs the software that is compatible with the platform (the server node), while others are more passive and delegate their resources, or stake, to the pool.

While Ouroboros is cheaper to run than a proof of work protocol, running Ouroboros still incurs some costs. Therefore, stake pool operators are rewarded for running the protocol in the form of incentives that come from the transaction fees and from inflation of the circulating supply of ada.

© IOHK 2015 - 2021


Cardano Logo

Cardano is an open-source project.

Cardano is a software platform ONLY and does not conduct any independent diligence on, or substantive review of, any blockchain asset, digital currency, cryptocurrency or associated funds. You are fully and solely responsible for evaluating your investments, for determining whether you will exchange blockchain assets based on your own judgement, and for all your decisions as to whether to exchange blockchain assets with Cardano. In many cases, blockchain assets you exchange on the basis of your research may not increase in value, and may decrease in value. Similarly, blockchain assets you exchange on the basis of your research may fall or rise in value after your exchange.

Past performance is not indicative of future results. Any investment in blockchain assets involves the risk of loss of part or all of your investment. The value of the blockchain assets you exchange is subject to market and other investment risks