Many delegates ask me what the minimum amount of ADA to stake is to a pool and the answer to that is, it depends.
There are many delegates to our own pool that are delegating as little as 1 ADA. For some people that is actually a hard amount of ADA to obtain.
When you're delegating a small amount of ADA, there are the things that you need to be aware of before moving your ADA and delegating it to a stake pool.
Transfer Fees from Exchange to Wallet
When you move your ADA from an exchange such as Coinbase or Binance, there are fees that occur to make that happen. Both of these exchanges charge 1 ADA to make that move.
Wallet Delegation Registration
When you initially start delegating to a stake pool, you must first register your wallet for delegation. This is a 2 ADA deposit that is stored in your wallet until you deregister your wallet and get a refund.
The transaction fee to start the delegation process is roughly 0.17 ADA. Any
Return on ADA
If we use the scenario of 20 ADA and take into account all of the transfer fees and wallet registration and transaction fees above, transferring 20 ADA to a cold wallet would leave us with approximately 16.83 ADA.
Using our calculator, the return of 16.83 per epoch is roughly 0.011527 ADA per epoch.
At this rate, earning 0.01 ADA per epoch, it would take 317 epochs to recover the ADA from the transfer and deposit that had occurred to start delegating. This is roughly 4.34 years. This is an unrealistic approach and a small amount of delegation, it is not worth losing the 3.17 ADA in the move to a cold wallet.
In this case, I'd recommend keeping the ADA on an exchange and staking there if it allows for on exchange staking services.
If you were to stake 100 ADA, it will take roughly 50 epochs to regain all of your transfer fees and deposits.
If you decide to add more ADA to your wallet over time, it will help with the transfer costs and ensure you get a better return from compounding.
There is no right answer for the minimum amount as you can delegate a fraction of an ADA as long as you have paid the transfer fees and wallet deposit.
To make the best decision, we recommend making the calculations based on how much ADA you have to stake to a pool and compare that to exchange staking or simply just holding on an exchange.
There are other issues when staking on an exchange as exchanges can be hacked, come under Government regulation or lock up your ADA and stop you from accessing your digital assets.