What is a staking pool?

A staking pool is a group of coin holders merging their resources to increase their chances of validating blocks and receiving rewards. They combine their staking power and share the rewards proportionally to their contributions to the pool. Setting up and maintaining a staking pool often requires a lot of time and expertise.

How does computing power affect staking pools?

Increased computing power allows for more blocks to be verified and validated via the Proof of Stake (PoS) mechanism, which increases the total sum of rewards a staking pool can earn. Staking pools can be either public or private, with each pool usually having a pool administrator who keeps the nodes or validators in operation.

What is a staking pool in cryptocurrencies like Cardano?

In the case of cryptocurrencies like Cardano, staking pools can be both public or private. Public pools allow for open delegation to all nodes within it (allowing them to reap rewards), while private pools only provide rewards to the owners of the pool. Here’s a more personal, in-depth review for the case of 3rd generation cryptocurrencies:

How does staking work?

The stake does not have to consist exclusively of one person’s coins. Most of the time, validators run a staking pool and raise funds from a group of token holders through delegation (acting on behalf of others) – lowering the barrier to entry for more users to participate in staking.