Balance and Stake in Cardano SL

There are two important concepts in Cardano SL: balance and stake. This chapter explains the difference between these concepts.

Balance

Balance is a real amount of coins a user has. Upon installing a Daedalus wallet on one’s computer and performing Ada redemption, one receives some amount of Ada. This amount of Ada is called one’s balance. A user can send some amount of Ada (within his balance) to other users, as well as receive any amount of Ada from them.

Thus, when we are talking about the balance, we are talking just about user’s money.

Stake

Stake is a concept from the paper. Unlike balance (the real amount of money one has), you can think of “stake” as a part of the whole financial power of Cardano SL. Stake gives a user the power to control various Cardano SL algorithm parts, for example: being the slot leader, voting in the Update system, taking part in MPC/SSC. This is why all thresholds in Cardano SL protocol are expressed in terms of stake, not balance.

Thus, when we are talking about the stake, we are talking about a user’s ability to control Cardano SL.

Balance and Stake Relation

Every coin in Cardano SL is associated with a balance and with a stake. We use transaction output to associate coin C with user’s balance, and use stake distribution to associate coin C with user’s stake.

It is possible to change association between coin and stake using stake delegation.