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Staking is the process of allowing people to participate in the decentralisation and security of the Cardano network. People can earn rewards for participating. In a decentralized network, decision-making power must be distributed among the participants. ADA coins are used to do this. Everyone who owns an ADA coin holds a stake, i.e. a certain share of decision-making power. These people are called stakeholders. ADA coins can be used to actively participate in the network consensus. New blocks must be created in the network at regular intervals. Entities called pools are responsible for producing blocks. A pool is a network node that is operated by a pool operator. Anyone with the necessary technical knowledge, equipment and a certain number of ADA coins can operate their own pool. Stakeholders can take advantage of ADA coins and engage in staking. It is necessary to have coins in your own wallet, which will allow you to choose one of the many pools to which coins can be delegated. By delegating coins, the selected pool gains a stronger position in the network and gets the opportunity to create more blocks. The strength of the pool is capped and can grow to the point of saturation. Stakeholders become stakers/delegates. Let's add that by delegating, stakers are essentially putting their trust in a selected pool. It is a kind of voting process. During staking, i.e. after the process of delegating ADA coins to the pool, the coins still remain in the owner's wallet and are not locked. The owner cannot lose the coins and can even spend them at any time. Time is divided into epochs of 5 days in the Cardano ecosystem. Between the transition from epoch to epoch, a so-called snapshot is taken, during which the exact number ADA coins in the wallets involved in the staking is scanned.

aaThe heart of the Cardano protocol is decentralization. To prevent existence of big pools, there is a limit to the size of rewards a pool can earn per epoch. The total stake of a pool consists of ADA coins of the pool operator (pledge) and delegated ADA coins. If the number of ADA coins in the pool exceeds what is considered the saturation point, the rewards for the pool operator and stakers begin to diminish. The saturation mechanism was designed to prevent centralization. The network encourages stakers to delegate to different stake pools and incentivize new operators to set up alternative pools.

Each pool operator must consider whether it is economically worthwhile to operate another pool after ADA coins fill the existing pool to the point of saturation. Stakers have free will in deciding whether to delegate their ADA coins to other pools of the same operator. Operators should earn the trust of stakers through some form of active work for the ecosystem. Stakers should consider whether a given pool operator deserves to operate multiple pools.

The Cardano protocol can be parameterized. The parameter K determines the number of existing pools, which is currently considered ideal. Maximum rewards for pool operators and stakers would be achieved if a few conditions were achieved. One of these conditions is that there are just the number of pools defined by parameter K, these pools are just before the saturation point, and all pools are 100% successful in producing blocks. You can calculate the saturation point by taking the number of ADA coins in circulation and dividing by K. Setting the K parameter to 500, this would be e.g: 34,000,000,000 / 500 = 68,000,000.