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Cardano Ranks Among Top Staking Networks, Report Finds

Sat, 12/03/2022 - 13:51
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Tomiwabold Olajide
Cardano outperforms decentralized staking networks
Cardano Ranks Among Top Staking Networks, Report Finds
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In a thread of tweets, crypto researcher Sooraj highlights what differentiates Cardano from other proof-of-stake chains, including Ethereum. In mid-September, Ethereum switched from a proof-of-work consensus to a proof-of-stake (PoS) one in a "Merge" upgrade.

According to staking rewards, Cardano ranks as the second largest staking network after Ethereum with a staking market cap of $8 billion, while Ethereum had a $21 billion staking market cap.

Here are details on top two PoS blockchains

According to Sooraj, five metrics are key for a PoS-based blockchain: the staking ratio, the initial coin distribution, the Nakamoto Coefficient (MAV), the total number of validator nodes and individual wallets participating in staking.

There are primarily two metrics that reflect participation in staking, which are the staking ratio and the number of individual wallets participating in staking.

In Cardano, stakers have a choice to run their validators or even delegate ADA to preferred validators. As Cardano has no locking periods, ADA can be re-staked whenever desired.

Staking rewards and ETH staking remain locked in Ethereum, with no ability to withdraw. Withdrawals are planned for the upcoming Shanghai upgrade. Likewise, staking is dependent on centralized staking providers like Lido and Coinbase.

There are two types of Ethereum nodes: nodes that can propose blocks and nodes that cannot. Nodes that propose blocks are few on Ethereum and require committing economic resources such as staked ETH.

The other nodes on the network, which form the majority, are not required to commit any economic resources and do not propose blocks, but they still serve a critical role in securing the network. Regarding the degree of participation of total coins in circulation in staking, which refers to the staking ratio, Cardano has a staking ratio of 71%, whereas Ethereum has a staking ratio of 13%.

The total number of individual staked wallets in Cardano could be compared to the total number of "unique depositors" in Ethereum. In this regard, Cardano could be said to have 14 times more participation than Ethereum.

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About the author

Tomiwabold is a cryptocurrency analyst and an experienced technical analyst. He pays close attention to cryptocurrency research, conducting comprehensive price analysis and exchanging predictions of estimated market trends. Tomiwabold earned his degree at the University of Lagos.