Using the correct terminology

As stake pool operators and Cardano enthusiasts we are often using the wrong terminology when communicating to our target audience.

So hence it is good to make clear to everyone what terminology to use when talking about staking and delegation.

Staking and delegation are different concepts.

Someone who does not run a stake pool is delegating its right to stake, known as “stake delegation” to a stake pool. Therefore you’re not actually staking but you are passively participating in the consensus protocol of the network. Basically you’re handing over your right to stake to the stake pool owner.

Stake pool owners are “staking” on behalf of their delegators and are actively participating in the consensus protocol of the network. The stake pool owner is actively participating in the network via and infrastructure of nodes. These nodes can run in the cloud or on local machines.

There are three types of nodes in the Ouroboros Proof of Stake algorithm:

1. Core nodes also know as “block producing node” . These nodes can only be slot leaders and create blocks of a period of time known as epoch. Core nodes should only communicate to a stake pool own relay nodes and not be publicly exposed. The task of the core nodes is to forge blocks and secure the network against bad actors by validating the block and the individual transactions within the block on basis of cryptography. Core nodes cannot create currency transactions.

Forging is the process of creating new blocks based on the Proof of Stake algorithm with an opportunity (lottery system) to receive a reward in ADA.

2. Relay nodes. You can think of relay nodes as a proxy between core nodes and the public internet. Since relay nodes are not isolated they can be attacked. Relays are stateless and have no stake, they can be moved and the number can be increased or decreased. In case they are taken down, this does deny service but it does not harm the integrity of the core nodes. Relay nodes do not have stake, cannot be slot leaders or create currency transactions. Relay nodes can communicate directly with other relay nodes, edge nodes and its own core nodes.

3. Edge nodes. Only these nodes can create currency transactions and can run basically run on any computer. Edge nodes do not have stake and cannot be slot leaders. Edge nodes can only communicate directly with relay and other edge nodes. A sample of a edge node is Daedalus wallet.

So instead of using “Why not stake with us?” or “Stake with us” we should consider communicating to our audience in the correct terminology: “Why not delegate your stake with us?” or “Delegate your stake with us”.

We hope this article is contributing to a better understanding and communication towards our target audience.