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Staking is not only a great way to earn rewards on Cardano, but it also plays a crucial role in decentralizing the network. Decentralization is important because it makes the network more secure and resilient, as there is no single point of failure.
When you stake your ADA to a stake pool, you are essentially delegating your right to produce a block. The more ADA that is staked to a pool, the greater its chances of being selected by the Ouroboros protocol to add new blocks to the blockchain. The more blocks a pool produces, the more rewards its members can earn. This incentivizes more people to participate in staking and increases the number of active stake pools, which in turn helps to further decentralize the network.
ADA rewards are distributed automatically by the protocol every five days. In Cardano these five-day periods are called 'epochs'. If you are delegating your ADA to a stake pool that produces at least one block every epoch, they can expect to receive rewards every five days. Many refer to these consistent events as 'ADA Payadays'. An ADA holder can expect to earn anywhere from 3.5% to 5.5% yearly interest on Cardano, just for staking, without ever giving up control over their tokens.
Cardano is becoming a secure and trustworthy platform for conducting transactions and storing value. Decentralization aligns with the core values of blockchain technology, which prioritize transparency and autonomy for all participants. Cardano is pushing the power to the edges by allowing anyone with an internet connection to actively participate in the operation of the blockchain.
In contrast, traditional banking systems are centralized and controlled by a small number of powerful institutions. This centralization has historically led to abuses of power and misuse depositor funds. Additionally, most traditional bank accounts do not earn enough interest to keep up with inflation, meaning that they do not generate wealth for the average account holder.
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