FAQ 

The Frequently Asked Questions responses below are written with people completely new to the space in mind, some of which I have experienced first-hand in conversations with people who already own ADA on exchanges and looking to know more, and others that may have been heard across numerous Twitter spaces.

Cardano Wallets

  • A wallet is software that allows you to interact with the blockchain. It may take the form of a dedicated downloadable app, a website or a browser extension. A common misconception is that your funds reside in your wallet but they are always on the blockchain, wallet software simply allows you to interact with those funds once ownership is proven through a private-key or seed phrase.

  • A seed phrase is a random set of words that are used to generate a wallet. It involves complex cryptography but the easiest way to think of it is as a super password of sorts. While forgetting something like a login may be able to simply be reset via email or some sort of customer service, when self-custodying your own crypto, you ARE the customer service. Cardano wallets usually consist of a seed phrase and a spending password. If you forget your spending password you can restore your wallet using your seed phrase and set a new one. Lose your seed phrase however and those funds could be lost for good!

    Seed phrases should always be stored safely offline and never stored on an internet-connected device. Write them down. Never screenshot it, photograph it or store it in a notes app, etc.

  • A full-node wallet is a wallet that has its own copy of the blockchain and runs an actual node on the network. As a result, they are usually restricted to desktops/laptops due to the higher resource requirements. A light wallet references a copy of the blockchain, often ran off-device by the wallet creator and so is less resource intensive. Light wallets are better suited to mobile devices and browser extensions.

  • There are three “official” wallets. Daedalus, a full-node desktop-only wallet and Lace, a new light-wallet from Input Output. In addition to Yoroi, a light-wallet for mobile and browser, from Emurgo.

    Community-built wallets include AdaLite, Eternl (browser and browser extension), Typhon (browser extension), NuFi (browser), Begin (mobile and browser extension) and Vespr (mobile).

    Hardware wallets Trezor, Ledger and Keystone are compatible with most third-party wallets. Ledger Live now supports sending, receiving and balance viewing in-app. Yoroi support Ledger Nano X devices on their mobile apps.

  • Official and community-built wallets support the native currency of Cardano, ADA, and other native assets. Bitcoin, Ethereum, etc are separate networks and cannot be stored in Cardano wallets.

    Other wallets, like Exodus, may support holding ADA alongside BTC, ETH, etc but often still lack support for Cardano native assets and offer limited staking support. That is to say, you are either restricted to staking in wallet creator pools or not supported at all.

    Community wallets allow you to stake wherever you want to.

  • There are currently a few mobile wallet options available for Cardano.

    Yoroi from Emurgo. The longest running mobile wallet for Cardano. Also supports Ledger Nano X devices on mobile.

    Eternl. While there have been some roadblocks via the iOS app store for their dApp Store implementation, full feature access can be achieved on mobile when used as a Progressive Web App (PWA).

    Lace from Input Output is a web-based wallet that supports hardware wallets. A mobile version is expected Q1-Q2 in 2025.

    Begin wallet is available on mobile and supports Ledger Nano X hardware wallets.

    VESPR wallet is a community favourite with a simple and clean user-interface. Also supports Ledger Nano X hardware wallets.

  • A “hot” wallet is a wallet that manages keys and resides on a device with a connection to the internet. A “cold” wallet is one that manages keys separate from an internet connected device. A Ledger hardware wallet for example manages all inputs on the device and removes the need to enter any keys or passphrases using a keyboard or mobile. Cold wallets are considered more secure than hot wallets for this reason. However, there is always the risk of losing your seed phrase to a cold wallet.

  • There is a Ledger app available for Ledger devices and recently added smart contract support. Ledger Live support was added earlier in 2022 although it remains less feature-rich then when paired with a community wallet.

    Most available desktop / browser extension wallets now support Ledger. Mobile apps with Ledger support include Yoroi, VESPR, and Begin.

  • ADA addresses begin with “addr1….” and Cardano native assets begin “asset….” Always ensure that when you are sending back to an exchange that they provide a Cardano address and not a “0x….” address as crypto.com has been known to do recently. You risk losing those funds.

  • Browser wallets allow you to interact with them directly in the browser with no need to download an app. Ideal for new people with a small amount of funds who aren’t overly interested in participating on DeFi platforms.

    Browser extensions however often have dapp connectivity and if you are wanting to participate on DeFi platforms then this is the way to go at the moment.

  • Today, most light wallets on Cardano support DeFi applications. These include Yoroi, VESPR, Eternl, and Begin.

  • If you have forgotten your spending password to a Cardano wallet you will be unable to send funds. However, as long as you still have your seed phrase secure, you can use it to restore the wallet and create a new spending password.

 Cardano Staking

  • Cardano is a Proof-of-Stake blockchain network. ADA holders help secure the network by staking their ADA and essentially vote for their chosen stake pool operator (SPO) to produce blocks. When a stake pool mints a block, the operator and their delegators are rewarded for their participation. To prevent any one pool from having too much delegation, there is a parameter that limits the size of a pool and decreases rewards when the saturation level is passed, encouraging delegators to move to another pool in order to maintain a level of decentralization.

  • When you first move funds into a new wallet you have to register that wallet as eligible for staking. This is usually as simple as opening a tab within the wallet, selecting a pool and signing a transaction. This usually costs around 2.17 ADA. 2 ADA is a refundable deposit, returned when the wallet is undelegated, and a 0.17 transaction fee.

  • 2.17 ADA is required to initially delegate a wallet. Some wallets may have a minimum but anything above 10 ADA should be fine.

  • Cardano staking is non-custodial and liquid meaning that your funds never leave your wallet, you are always in control and are free to move those funds at any time. Time is divided into slots and epochs on Cardano. An epoch lasts 5 days and a snapshot of balances at the end of the epoch are how rewards are calculated. When you delegate you are in a way, pointing your wallet at a pool and saying “I give this pool this many votes towards producing a block”. In the most simplest of terms.

  • This is entirely a personal choice. There are many types of pools out there;
    - Single Pool Alliance: SPOs who have vowed to only ever run one pool, in keeping with the original vision and decentralisation of the network.
    - Mission Driven Pools: Pools with a strong focus on environmental or charitable work.
    - Multi-Pools: More than one pool ran by an operator or group.
    - xSPO: A group of extra small pool operators with less than a million ADA of delegation working towards more delegation in order to mint a more consistent number of blocks.
    - ISPOs: Initial Stake Pool Offerings are pools that have teamed up with another project and offer some of that projects tokens in return for delegation.

    You can choose based on a number of factors. You may want to support decentralisation, you may resonate with a pools charity work or you may just want to help a pool get going with block production.
    You can find pool info at sites like PoolTool, ADApools, Cardanoscan and Pool.pm.

  • First and foremost, decentralization. By moving your funds off of an exchange you are helping decentralize and secure the network. Secondly, as the saying goes “not your keys, not your coins”. By moving your funds off of an exchange you are taking control of your own funds. Exchanges may offer good rates but often the small print might paint a different story. Binance offering 8% APY for example might be limited to small balances and only over the period of 30 days, with locking. Coinbase began offering 3.75% which has already dropped to 2.60%. Staking with community pools is the most consistent and flexible way to stake your ADA.

  • Rewards are calculated at the end of every epoch (5 day period). There is an initial delay of a few epochs when you first delegate, so you might not see rewards for 15-20 days initially. Thereafter, as long as your chosen stake pool has minted at least one block during an epoch, you will receive rewards for your participation. Smaller pools may receive higher rewards but less often, while larger pools may receive slightly lower rewards but more often. The protocol should average out over a year between 4-5% currently.

  • When you first delegate a wallet and register with the 2.17 ADA you create a stake address for that wallet. You can find this address in your chosen wallet and go to a site like PoolTool and use their “Rewards for Taxes” tool to enter your stake address and see the rewards history. Some wallets may also show this information in varying degrees.

  • The short answer: No. When you move pool the change will be registered at the end of that epoch. As per the delay when you first registered, you will continue to receive rewards from your previous pool for two epochs, before receiving the rewards from your newly chosen pool. To the end user, it is seamless. You may on occasion however, see an initial decrease if your new pool mints blocks on a less frequent basis than your previous pool.

  • Any delegation to HEPHY would always be massively appreciated. Throughout the first year of the pool I have kept the pool up to date, passing through each upgrade without a hitch and always rotated the necessary keys on time. The pool has managed to reliably mint 34 blocks as of February 2025. I hope to go on to many more.

    In addition to simply running a mainnet pol, HEPHY also contributes signing snapshots on the Mithril protocol, runs a pool on SanchoNet (the Cardano governance testnet) and runs a full-node for the Ergo blockchain.

    If you find the information laid out on this site to be helpful and of value then please consider the pool for even a little delegation. Many thanks.

Voting (Project Catalyst)

  • Project Catalyst is Cardano’s ongoing experiment in blockchain governance. Cardano has a treasury system whereby projects can submit proposals and request for funding which the community votes on.

  • Project Catalyst is currently run on a platform called Ideascale and you can register to access detailed information on the progression of project proposals. The Cardano Community are gradually creating tools to help people process the increasingly overwhelming information available as each Fund grows in size with more and more proposals, one such tool can be found at lidonation.com.

  • Currently there is a minimum wallet balance of 500 ADA required to vote although this may be reduced in the future.

  • Voting currently occurs across both wallet and a dedicated Catalyst voting app. You can register in wallet and then a QR code can be used to link your voting power to the Catalyst Voting app. When voting opens you can select the proposals you wish to upvote or downvote and submit your choices via the app. A small ADA reward is then later received for your participation.

  • As with any governance structure, voting is your chance to have your say. You can use your ADA, your stake in the network, to decide how community funds should be spent. By participating you can help fund new development of the ecosystem as well as defend against questionable actors by downvoting proposals that are unachievable, cash grabs, etc.

  • Currently no. You have to generate a separate QR code for each wallet, link it to the voting app, cast your votes, delete the app and link to another wallet. Repeat for each wallet.

    However, Input Output have said that they are working on a Voting Centre to be a part of their future wallet(s) so watch this space. Project Catalyst is a continually evolving process at this stage.

Cardano Governance

  • Following the Chang and Plomin hard forks on Cardano, the community is now in charge of shaping the future of Cardano. There are 3 elements of governance that work to keep each other in check, these include Delegated Representatives (DReps), Stake Pool Operators (SPOs) and the (Interim) Constitutional Committee (CC/ICC).

  • A DRep is someone who holds the credentials to be able to participate in Cardano governance. This can be an individual (Direct Voter) or someone who may vote on someone else’s behalf (Delegated Representative or DRep). An ADA holders funds never leave their wallet and are not locked while delegated toa DRep. However, stake does need to be delegated to a DRep or a pre-defined DRep in order to be able to withdraw staking rewards.

  • There is a 500 ADA deposit to register as a DRep. It is possible to delegate to a DRep instead, for the price of a transaction fee.

  • There is a growing number of governance tools developing, among these are; GovTool, Tempo and 1694.io.

    Voting via the CLI is always available for the more technically minded. Tutorials are available at sancho.network