Big Announcement for Cardano at What do You Need to Know? recently announced that it now supports staking ada, right on its platform. It promises its users a 6.1% APY return on their staked ada, with no unstaking period.

With this announcement, Cardano joins a limited but growing list of “proof of stake” crypto assets available for direct staking on the Binance platform. Since “all press is good press,” we are delighted to see Cardano growing in renown and recognition from prominent institutions, but what’s the news behind the headline?

Should newcomers, crypto-dabblers, and everyone else be jumping at this new opportunity to stake ada on Binance? In a word, no.

No, no, no, no, no.

Deep breath

If you learn nothing else about staking, let it be this: Get your ada off of an exchange. Put it in a Cardano wallet, and keep your seed phrase safe. Stake your ada with an independent Stake Pool operator.

If you are wondering why or want to be able to explain it better to your friends who are just joining the ranks of the crypto-curious, read on:

Support Decentralization

Blockchain networks like Cardano are strong and secure due in part to decentralization. When you stake on a centralized exchange, who do you think runs that stake pool? The exchange, of course. As they fill pool after pool to the ideal saturation point to maximize rewards, they’ll just spin up a new one and send the next batch of delegations to that new pool over and over again. The percentage of the Cardano network that is controlled by a single business will grow and grow. This is terrible news for the health of the network and for the future of your investment.

Stay Safe

Some of us have grown up with cultural assumptions that big institutions are safe, reliable, and should be counted on to have our backs. To put it quite simply, this assumption is not always true. In the case of holding and staking your crypto assets, however, it’s the ultimate in backward thinking. Not only does the reduction in decentralization hurt the network, but you are leaving your crypto “eggs” in one giant basket. There is no federal backing, insurance, or gold bars in a vault to protect or guarantee your assets. If that one institution gets hacked or breached, your funds will be gone. This is not a mere hypothetical: investors who held their crypto on the centralized Celsius network had their funds locked up when it became insolvent and declared bankruptcy. The ultimate outcome of that debacle is still uncertain, but it’s certainly not looking rosy.

Support Builders

Independent Stake Pool Operators (SPOs) are the creative and ambitious individuals who saw the potential of blockchain technology and wanted to jump in and build. Many are developers who, in addition to running a network node, are building blockchain applications for the future. Some SPOs are using their pools to help fund other community projects. Staking with an independent Staking Pool is a way to safely and passively support that work!

Support Small Businesses

Every independent Stake Pool Operator is a small business owner. They are taking on monthly costs to pay for servers, computers, solar panels, or other utilities and spending time on maintenance tasks for their node. The developers at Binance, who we’re sure are nice people, are also doing this. If you are someone who wants to live in a world with more unique mom-and-pop shops and fewer Walmarts - this is the equivalent in the Web 3 world. What should Main Street on the future internet look like?

Not Your Keys, Not Your Crypto

It’s a pithy saying, but it’s true. Until you put your funds into a Cardano wallet with your secure seed phrase, you don’t own any particular ada tokens. Part of this problem relates to the safety issue addressed above, but there’s more to it.

With your crypto held on an exchange, you are subject to the rules and fees of that platform, which may be changed or updated at any time.

Furthermore, if you want to use your money for anything, you can’t. (Read that sentence again!!!) To buy something, participate in DeFi, or try a new DApp, you must own your ada in your own wallet. An exchange is not a bank you should trust to hold your money, and just run to a Metaverse ATM when you need an ada coin. They’d like it if you thought of it that way! However, the financial systems of blockchain are different from legacy systems. It’s time to think about your money in a new way!

It’s Just As Easy

For the most part, I can’t blame Binance for making this move. They are a big business, and this is a smart big-business decision. However, one section on their website was particularly irritating. It reads as follows:

Binance.US simplifies the staking process, allowing customers to stake in a few clicks. While the platform will facilitate all staking operations on a technical level, rewards accrued through staking are passed on to participating customers.”

Listen up, folks! Staking is dead easy! It only takes a few clicks, no matter how you do it. You don’t need Big Brother’s special green button to help you do it. Every native Cardano wallet has a perfectly obvious staking tab, where with “just a few clicks,” you can safely and securely stake your ada with an independent Stake Pool.

Furthering the smoke-and-mirrors deception of this website blurb is the suggestion that there are “staking operations” on a “technical level” that Binance is taking care of for you so that you don’t have to. This is pure hogwash. Staking does not require any technical participation from you, the delegator.

Lean In - Learn More

When you go to stake your ada, you might pick the first independent stake pool on the list and click the button to stake. That would be ok and a great first step. But you might also get curious, and click the “Visit Stake Pool Website” link, to see what’s on the other end. Watch out - you might get sucked in! What you will find on the other end of those links is a dazzling variety of things:

  • Some Stake Pools identify as “Purpose Driven,” which usually means that a portion of their proceeds is donated to a good cause. Your stake could do even more good in the world while still earning passive rewards for you!
  • Some Stake Pools offer their delegators additional benefits, like unique native tokens, NFTs, and more.
  • Some Stake Pools support new blockchain-building projects. You might find a project that interests you, or you might learn more interesting things about what people out there are building with blockchain.

Be Smart

If you are reading all of this and thinking, “But I’m just a casual investor. I’m not trying to get too deep into any of this,” then this is for you: Be smart about your investment. Blockchain projects don’t grow, develop, gain value, and achieve long-term success through hype or magic. The only chance for long-term success and happy returns on your investment is if Cardano gains adoption as a TOOL - not just as a listing on an investment app. The builders, the DApps, the DAOs, the community pages, the NFT marketplaces, the Project Catalyst innovation experiment – all of these things, which are supported by your stake with an SPO, are what will lead to long-term success of the Cardano ecosystem.

Before we conclude

I’d like to acknowledge that centralized exchanges (CEXs) like Binance are not “bad,” per se. I live in the U.S.A., and if I had a fistful of dollars that I wanted to use to get some ada, I know of two ways I could do it:

  • I could go to the Bitcoin Kiosk at the grocery store! After inserting my cash and following the prompts, I would own a little bit of Bitcoin. Then I could log into an exchange and trade my Bitcoin for ada.
  • I could put my money in a traditional bank, create an account on Binance or Coinbase, and link it to my bank account. Then, I can transfer money from my bank to the exchange and buy some ada.

These modes of turning regular, “fiat” money into crypto are called “On-ramps.” In different parts of the world, the details of what kinds of on-ramps are available will vary due to differing financial systems, government regulations, and more. Whatever the particulars, centralized exchanges are essential as on-ramps. You should use a CEX as the right tool for certain jobs and then take the next step to gain full custody of your assets.

As a last nod to Binance, let’s recognize that this announcement is a step in the right direction. Before this news, you could buy ada and hold it on Binance; you just couldn’t stake it. But guess what - Binance was staking it for you and keeping 100% of the rewards! These rewards, being earned by staking your money, should have been yours all along. This news marks progress, but let’s remember it’s not the last train stop on the crypto railway.

Let’s do this

If you are ready to move your ada off of an exchange, it’s as easy as 1-2-3:

  1. Get a Cardano Wallet. Try Yoroi or Eternl, or do your own research and pick from among recommended wallets.
  2. Click the “Receive” tab in your wallet, and copy the receiving address. From the exchange, use that address to send your ada to your wallet.
  3. Click the “Staking” or “Delegation” tab in your wallet. (These words mean the same thing, and you will see them used interchangeably). Search for a Pool you’d like to delegate to using the search bar, or click around and look at a few. Then click the button that says “Delegate.”

This article was first posted at Lido Nation.
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yes, and I’d add to the list of causes for concern that the offered APR of 6.1% (if that’s what they are really paying out), is currently greater than the achievable income from Cardano protocol-based staking + delegation itself… so what are they really doing with your funds? :fearful:

Related question: are they even keeping your deposits in ada at all? … and not more likely putting the equivalent value into another blockchain protocol with higher returns but undisclosed risk? :cold_sweat:

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Step 0: Get a hardware wallet.

You might think you can keep your computer safe and secure but you don’t.


I absolutely wondered about that too, but didn’t want to speculate and frankly didn’t have your insight about what the answer could even be. Thanks for chiming in!


Step 0, love it. Thanks!

This is a rather dogmatic suggestion, so I just want to remind readers that there are a couple of open source / DIY solutions already documented on this forum (and probably more on the way) that address this inherent computer security problem, providing alternatives to the “black box” of a hardware wallet (which might be engineered with security vulnerabilities… you’d never know, would you?) :face_with_monocle:

COSD I gotta admit I don’t know about these solutions you speak of, and I’m not sure what I should search for to learn more. Can you point us in the right direction?


thanks @Stephanie_King … here is the first one to come along, from @johnshearing & discussed in several threads here in the Forum:

The second one (the Frankenwallet) is a software-only solution providing security isolation from the main environment of one’s own computer, using a bootable Linux USB drive. The following page isn’t the main landing page; rather one of the introductory pages which has some reasons you mightn’t want to take either the security or the functional standard of hardware wallets for granted:

BTW I don’t believe these messages are off-topic because the digressive question & responses will help people think about the nature of “custody” … including the question of whether they’re really “your” keys if you’ve only transferred your asset control from a crypto exchange to a piece of closed design & closed source hardware. :face_with_monocle:

@COSDpool Thanks for sharing those links. I checked out both links and am learning already, and I can see that the rabbit trail extends much further with both ideas.

For sure - the whole realm of how crypto wallets work IS NOT and MUST NOT be at the “end” of its journey. The current landscape of solutions is … fraught. I think sharing ideas and information about this topic is nearly always relevant to the conversation!


I standby my statement about the hardware wallet. Regular people just don’t have skillset to setup Linux USB drive/Raspberry Pi/virtual machine etc. to be used as key vault and maintain the opsec that it requires. They are just going to install some wallet from app store and save the key phrases into their device or cloud as plain text because it is easy. And then we have one more topic about stolen funds…

Usage of the crypto has to be easy and secure (enough) if we want to see any mass adoption.


any recommendations for a good cold storage wallet for offline transaction signing?

If you mean solutions for air-gapped signing, @COSDpool already linked two of them above:

If you mean hardware wallets, Ledger Nano and Trezor Model T are compatible with most Cardano wallet apps.

If you mean GUI solutions for air-gapped with less need for command-line interactions, I fear there is not so much available right now. I know that Eternl can export the unsigned transaction and that could be used to only do the signing on the command-line (or write a very small GUI application for it), but I’m not aware of a guide or ready-made solution.

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This is a very good thread. Thank you!

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Thanks for the information. I was really hoping for a wallet I could use with the key to just monitor an address and broadcast signed messages (seems like Eternl has this feature?). The signing I want to do completely offline on a separate device that is never connected to the internet for its entire life. That way my key is never exposed but I can still use it as if the wallet was indeed online etc. I am pretty familiar with Cardano-CLI etc. But will do some more digging with the leads you have given me here.