6. Exchange vs SPO staking
Here we will briefly discuss why it is important to delegate your stake to SPOs instead of exchanges.
Centralised Exchanges (CEXs) go to great lengths to keep your crypto on their systems. This has some obvious drawbacks for investors. Let's highlight some important ones:
- CEXs, like all big financial institutions are Centralised and eventually can run into issues
- Most CEXs have no vested interest in the health of the Ecosystems they trade in
- Most CEXs have limitations when it comes to staking your ADA with them.
By getting your ADA off CEXs and staking it with independent SPOs, you are helping the Cardano Ecosystem stay Decentralised, and you gain more benefits:
- Full independence (self-custody allows direct control of your funds)
- Ability to invest in projects you believe in
- In most cases your RoA (return of ADA) will be larger, as you can stake the full amount you own
Self-custody may sound scary. If you want to learn more about it, so as you can start staking with SPOs with greater confidence, here are a couple of useful resources: