Most stakers understand the basic principles of Proof-of-Stake and know that every epoch (5 days) they will receive rewards from the protocol if the pool to which the ADA coins are delegated has minted at least one block. There is confusion about how rewards are distributed by the Cardano protocol. In this article, we will explain this.
- Rewards for staking are accumulated in a reward account that uses a balance rather than a UTXO-style accounting model.
- The reward balance increases every epoch and ADAs are automatically delegated to the pool.
- Reward balance does not count as voting power in Catalyst. In order for ADA to be counted, a withdrawal is required through an on-chain transaction.
- The current system does not require regular actions from stakers and saves resources.
This article was prepared by Cardanians with support from Cexplorer.
Read the article: https://cexplorer.io/article/how-distribution-of-rewards-works-on-cardano