Understanding the Delegation MechanismΒΆ

As Cardano is a proof-of-stake system, owning ada not only allows you to buy goods or services, but also confers upon you the right and obligation to participate in the protocol and create blocks.

These two uses can be separated by the delegation mechanism, meaning someone who owns ada can keep the spending power, while delegating the power to participate in the protocol to someone else, a stake pool. It is important to note that funds can be spent normally at any time, regardless of how they are delegated.