Proof-Of-Stake And Ouroboros: The Most Environmentally Sustainable Blockchain Protocol
Ouroboros is the first peer-reviewed, verifiably secure blockchain protocol, and Cardano is the first blockchain to implement it. Ouroboros enables the Cardano network’s decentralization, and allows it to sustainably scale to global requirements without, crucially, compromising security.
The protocol is the culmination of tireless effort, building on foundational research, and is propelled by a vision for more secure and transparent global payment systems, and a means to redistribute, more fairly, power and control.
Source: cardano.org
Learn About Ouroboros
Anyone Holding ADA Can Participate Without Restrictions
With Cardano’s Ouroboros there are no restrictions on your ability or freedom to stake when, where and for how long. There is no lock-up period for your ADA. Your wallet is staked, not your individual coins. This gives you the freedom to use it for purchases or add or withdraw funds with ease and never worry about staking. The Ouroboros protocol will take a snapshot of your wallet every 5 days, which will determine your staking rewards.
In addition, you own the keys to your wallet! You never give control of your funds to stake pool operators, or the protocol. You have the power to change pools, unstake, withdraw, buy NFTs or anything you desire. Nobody but you can control or spend your funds and there is no slashing. Your ADA is staked 100% risk free! Just ensure to protect/safeguard those private keys!
Staking With a Stake Pool is Similar to Bitcoin Mining Pools
Bitcoin uses immense computing power to solve complex problems and the first to solve it gets rewarded in Bitcoin. Due to the increase in difficulty people often “pool” their computing power to increase their chances of a reward.
Cardano’s Proof of Stake is different fundamentally, but the stake pools are a similar mechanic. Most people don’t have enough ADA to produce blocks (earn rewards) on their own, so they join a stake pool where the Operator runs the computers validating transactions. These stake pools then split the rewards amongst their delegators. The more delegation a stake pool garners, the more likely they are to produce consistent blocks.
Stake Pools Produce Blocks, Giving You Rewards!
Stake Pools spend all day processing transactions on the Cardano blockchain. When a stake pool “produces a block”, that is saying the Ouroboros protocol has given them the right to stamp their name on the block as having validated the transactions in a set time period. Each block is validated by a pool, which is all determined by the protocol. When your pool (FATTY) produces a block, or multiple blocks, the Ouroboros protocol rewards the pool for doing so.
By delegating your ADA to FATTY, you are helping the pool produce blocks and secure the network! The rewards are paid to the pool, split automatically according to stake and distributed to your wallets. The stake pool operator has no control over the reward payment, it is all done automatically. These rewards come from monetary expansion and network transaction fees, and will average about 5%/year.
