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Staking transactions

Staking is a fundamental feature of Cardano, allowing you to earn rewards by delegating ada to stake pools. This tutorial shows how to delegate your ada to a stake pool, withdraw rewards, or stop delegating your ada if you decide to switch to another stake pool.

To delegate ada, first, you need to generate a stake key pair. This involves creating a stake.vkey and stake.skey, in addition to your regular payment key pair (payment.vkey and payment.skey), and obtaining a new address called stake.addr, similar to your payment.addr.

Assuming you already have your payment.vkey and payment.skey, which you can easily generate using the cardano-cli address key-gen command, proceed by creating the stake.vkey and stake.skey:

cardano-cli stake-address key-gen \
    --verification-key-file stake.vkey \
    --signing-key-file stake.skey

Now you have your payment key pair and stake key pair. The next step is to build the payment.addr and stake.addr files:

# payment.addr
cardano-cli address build \
    --payment-verification-key-file payment.vkey \
    --stake-verification-key-file stake.vkey \
    --out-file payment.addr

Note that the example includes the --stake-verification-key-file argument. This command is used to create an address that includes its staking part. Addresses without a staking part are primarily used for sending and receiving ada, as well as interacting with DApps. Some examples may omit this argument, but it's crucial for delegation and participating in the staking process.

# stake.addr
cardano-cli stake-address build \
    --stake-verification-key-file stake.vkey \
    --out-file stake.addr

This command uses only the stake verification file.

Before proceeding with delegation, it's essential to create two new certificates: a registration certificate and a delegation certificate. These files are required to register the stake key on the blockchain and indicate your intention to delegate ada.

This command generates a certificate, which indicates the intention to register the stake key:

# registration.cert
cardano-cli stake-address registration-certificate \
    --stake-verification-key-file stake.vkey \
    --out-file reg.cert

Create a delegation certificate:

# delegate.cert
cardano-cli stake-address delegation-certificate \
    --stake-verification-key-file stake.vkey \
    --stake-pool-id pool18pn6p9ef58u4ga3wagp44qhzm8f6zncl57g6qgh0pk3yytwz54h \
    --out-file delegation.cert

At this stage of the tutorial, you should have already selected a stake pool. The example features ADACT (PoolId: pool18pn6p9ef58u4ga3wagp44qhzm8f6zncl57g6qgh0pk3yytwz54h). You can list all pools using the command cardano-cli query stake-pools or visit https://preview.cardanoscan.io/pools to select the pool that best suits your needs. Please note that the example uses the preview testnet. If you're using another testnet or mainnet, make sure that the pool ID is on the correct network.

Now that you have the reg.cert and delegation.cert files, you can proceed to the next step. You need to send a transaction containing the certificates. There are two options: sending them individually or sending them together. The example shows how to send them both at the same time.

Start by querying the funds of payment.addr:

cardano-cli query utxo --address $(cat payment.addr)
                           TxHash                                 TxIx        Amount
--------------------------------------------------------------------------------------
142c46bb93b9c80140a6302e4a8a360e6f46f55aaf001c825ca790bb23572754     0        10000000000 lovelace + TxOutDatumNone

If there are no funds in the address, you can request them from the faucet. Make sure you select the right testnet.

It's time to build, sign, and submit your transaction.

The command below introduces two new arguments of transaction creation: --witness-override and certificate-file. The first one specifies that the transaction will require two signatures. Therefore, transaction fees will be higher. certificate-file adds your new certificates to the transaction:

cardano-cli transaction build \
    --witness-override 2 \
    --tx-in 142c46bb93b9c80140a6302e4a8a360e6f46f55aaf001c825ca790bb23572754#0 \
    --certificate-file reg.cert \
    --certificate-file delegation.cert \
    --change-address $(cat payment.addr) \
    --out-file delegateTx.raw

In the signing phase, you need to add two signatures: payment.skey and stake.skey:

cardano-cli transaction sign \
    --tx-body-file delegateTx.raw \
    --signing-key-file payment.skey \
    --signing-key-file stake.skey \
    --out-file delegateTx.signed
	
cardano-cli transaction submit \
    --tx-file delegateTx.signed
Transaction successfully submitted.

Once the transaction is submitted and processed, you have successfully delegated your ada. Now, let's take a look at your delegation and rewards:

cardano-cli query stake-address-info --address $(cat stake.addr)
[
    {
        "address": "stake_test1uq954t492tmusk2dy9z505g3cz3sfpnh0swsqjmzk47rasqyn8uqp",
        "delegation": "pool18pn6p9ef58u4ga3wagp44qhzm8f6zncl57g6qgh0pk3yytwz54h",
        "rewardAccountBalance": 0
    }
]

After a few days, you will receive rewards, and the next part of the tutorial demonstrates how to withdraw them.