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I. Introduction

What is Daedalus?
Daedalus is a full node asset manager for the Cardano ecosystem. It is developed and supported by Input Output Global. Because Daedalus is a full node, It syncs to the full copy of the Cardano Ledger, thus requiring hard drive space on the machine running it. 
Why Daedalus?
Daedalus is currently the most sophisticated and feature rich asset manager available for the Cardano ecosystem. Daedalus is the perfect tool for intermediate & advanced users who want to actively participate in the network and for those who want to use the newest features first. Input Output Global’s development of the application is comprehensive and will most likely offer update support for the foreseeable future. 
 
Why not Daedalus?
Daedalus is only available on Windows, MacOS, and Linux. There are currently no mobile app or web browser versions of the Daedalus software. Daedalus will only work if it is syncing with the network, therefore every time the application is opened, it must sync. This can cost time and effort if the node is having difficulty connecting/syncing. For those who prefer a lite wallet,, Daedalus may not be for you – please consider Yaroi or AdaLite. 

II. Features

Current Version 2.2.0 
 
Wallet Management
  • Wallet creation and restoration 
  • Send/Receive ADA
  • Monitor transactions and UTXO distribution 
  • Manage multiple wallets 
Staking
  • View all active Cardano Stake Pool Operators (SPO) with built in rating system
  • Delegate wallet funds to SPOs without losing control of your assets 
  • Monitor current Epoch and Slot live with the Blockchain 
  • Allows Cardano-CLI use without a relay node for the Linux lovers out there 
Future Features
  • Multi User Wallets & Hardware (Ledger/Trezor Support) 
  • Manage multiple assets on the Cardano Network.
  • Participate  in the governance protocol with voting.
  • Directory for identification credentials issued on the Cardano network 

III. Installation

1. Navigate to the Daedalus website at https://daedaluswallet.io  

2. Click on “Download”
 
3. Choose the operating system you are using and click on “Download Daedalus.” Note: Current version as of this Tutorial is 2.1.0
4. Once downloaded, run the installer.  
5. Run the application and the network will sync automatically. Note: The initial sync with the network will take some time (over a couple hours depending on your internet) and will require permissions from your firewall.  After the initial sync, Daedalus will only need to update the ledger depending on how long the program has been off. 

IV. Wallet Management

Wallet Creation 
 
To create a brand new wallet use the following steps once you boot up and sync Daedalus. 

1. Click on “Add Wallet” Note: if you do not have any wallets loaded on Daedalus, you will be sent directly to Step 2. 

2. Click on “Create”

3. Enter wallet name and spending password. 

4. Confirm through recovery phrase warning. 

5. Write down the recovery phrase. WARNING: Your recovery phrase is the only way to recover your wallet, make sure it is written down or secured on cold storage. Anyone with this phrase can access your funds from any wallet. 

6. Enter recovery phrase. 

7. Confirm through final warning. 

REMEMBER!

Wallets do not live in Daedalus. Wallets live on the blockchain. Daedalus is only a tool used to interact with the blockchain on your behalf. The spending password only shields wallets loaded into the Daedalus application. If you delete your wallet, delete Daedalus, or lose the machine that has Daedalus installed; the spending password will be useless in recovering your wallet. The only way to recover a wallet is by using your 24 word recovery phrase, thus requiring you to secure it (OFFLINE) as if it were cash. With your recovery phrase, you can generate your wallet on any Cardano asset manager whether it be Daedalus, Cardano-CLI, Yaroi, AdaLite, or any future wallets. 

Wallet Restoration
If you currently own a wallet and need to restore it, use the following steps once you boot up ans sync Daedalus. 
 

1. Click on “Add Wallet”

2. Click on “Restore Wallet”

3. Choose the wallet type that you want to restore. Most will be either “Daedalus” or Yaroi.”  

4. Choose the amount of words in your recovery phrase. Note: On July 29, 2020, the Cardano network upgraded from Byron to Shelley. With the Shelley upgrade, wallet recovery phrases were increased from 12 words to 24 words to improve security. If you are reading this tutorial, you most likely have a 24 word Shelley wallet. However, if your recovery phrase only has 12 words, then you own a Byron wallet – which will be updated to a Shelley wallet once you restore it.  

5. Input recovery phrase.

6. Input Wallet name and spending password. 

7. Wait for your wallet to sync with the blockchain. Note: Your wallet will always initially show 0 balance. The correct balance will be shown once the wallet syncs with the blockchain.  

8. Once the wallet it synced it will show your balance.  

Send/Receive ADA
To send ADA, use the following steps once you boot up and sync Daedalus. 

1. Click on the Wallet that you want to perform the action. 

2. Click on the “Send” tab. 

3. Input the receiver’s address and amount and click “Next”. Note: the transaction fee will automatically be added once you input your desired amount.  

4. Input your Spending Password and click “Confirm.”

5. Monitor your transaction on the “Summary” tab until you see a “Transaction Confirmed” note in green under the ADA spent.  

To receive ADA, use the following steps.

1. Click on the “Receive” tab to reveal all your generated addresses. Copy one of the generated addresses and send to the sender. Note: multiple addresses are generated for each wallet. This is done to enhance your privacy while transacting on the blockchain – it is recommended that you share a different wallet address every time you transact.   

Monitor Transactions & UTXO Distributions
The “Summary” tab will be your home base to monitor your activity on Daedalus. It contains the following information: wallet name, balance of ADA, number of pending transactions, number of transactions, and recent transactions. If you click on one of your recent transactions, it will reveal the amount of ADA sent/received, time of transaction, from addresses, to addresses, and transaction ID. The addresses and the transactions ID will link you directly into the Cardano explorer where you can view the transaction on the public ledger. Immutability! 

The “Transactions” tab is where you can view all your transactions from the genesis of the wallet. The transaction tabs function the same as those in the “Summary” tab. There is a filter function to help you navigate through a history of transactions. 

 The “More” tab drops down the “Settings” and the “Wallet UTXO Distribution” tabs. 

In the “Settings” tab you can change the name of your wallet, change the spending password, delete your wallet, and verify your recovery phrase. Note: It is important to regularly verify your recovery phrase to confirm the stored copy is correct.   

 The “Wallet UTXO Distribution” tab is where you can monitor your unspent transaction outputs. Unspent transaction outputs (UTXO) is the mechanism the network uses to keep track of the user’s balances. Fun fact: This is the same system that is utilized by the Bitcoin Network.

V. Staking

Proof of Stake is the bedrock of a scalable decentralized network. It incentivizes independent Stake Pool Operators (SPO) to run block producing nodes  by putting up stake. This removes the requirement of the energy hungry and expensive “Mining” system that is preventing previous generation blockchains from scaling. Those in the Cardano ecosystem can stake their ADA to a trusted pool operator to receive both rewards (paid out in the form of ADA)  and get to participate in making the network more secure and decentralized. The staking process is very easy and can be done directly on your asset management apps such as Daedalus and Yaroi. At the time of this writing, Daedalus is the most comprehensive staking tool available and is the most recommended. Staking is safe and will not require you to send your ADA outside of your wallet or lock your transaction ability. 

Enter the Staking Center on the far left menu of the Daedalus user interface. This section of the application is split up into four tabs : “Delegation Center,” “Stake pools,” Rewards,” and “Info.”  

Delegation Center
The “Delegation Center” is where you can view the current Cardano epoch, the current slot, and time until the next epoch. An epoch is a period of time (currently 5 days) that is used to denote rewards cycles for SPOs. Also shown are all the user’s wallet’ balance and delegation status. As of this writing, wallets can only delegate to a single SPO, therefore if you want to delegate to multiple pools, you have to create separate wallets. 
Stake Pools
The “Stake pools” tab is where you will find a list of all the stake pools currently registered on the Cardano Network. They will be ranked based on the amount of ADA you have available to delegate. Note: you can manually adjust the amount you intend to delegate by using the slider at the top of the user interface. When you click on a stake pool ticker you will see it’s name, a brief description, the pool website, the rank, the controlled stake, the pool margin, the pledge, the cost per epoch, the produced blocks, and finally, the button to delegate to that stake pool. 
Rank
Exact stake pool ranking and performance info will remain random until the network begins to decentralized later in the month of August 2020, however, there are theoretical metrics that we can use to make judgement on stake pools. 
  1. Performance, which is quantified by the pool’s availability to produce blocks (the “on time”), the amount of block produced, and the ability to meet pledge. 
  2. Pledge, which is the amount of ADA that the SPO commits to staking to their own pool. This can be any amount, however higher pledged pools will have advantages when it come to being selected to produce blocks. WARNING: If a SPO does not meet his/her pledge commitment, the pool will not be able to produce blocks guaranteeing that neither the SPO or the delegators will receive any rewards. Make sure the pool you choose meets their pledge commitment. 
  3. Saturation, the point at which a pool reaches maximum delegation. There will be a drop off of rewards for pools that have delegation over the saturation point. Note: the saturation point is ever changing and will adjust depending on the needs of the network. 
Controlled Stake
Controlled stake is the percentage of the overall available stake that is delegated to that pool.
 
Pool Margin
The pool margin is the percentage of the rewards delegators generate that are given to SPOs as compensation. This is not a direct fee to delegators, it is just a margin of the rewards produced. Delegators will not be charged anything. Most SPOs will advertise what they use the margin for. Some will eliminate the margin or make it incredibly small so delegators can maximize rewards, some will use their fee for charity of advocacy. It is important for delegators to know who they are delegating to and check is the SPO’s values/goals line up with the delegator’s.
 
Pledge
The pledge is the amount of stake that the SPO puts up themselves. This number is determined by the SPOs when they register their pool with the Cardano network and is public information. It is  imperative that SPOs actually stake what they publish. If they don’t they will be disqualified from making blocks resulting in zero rewards for both the SPO and the delegators. Therefore it is very important that delegators do their due diligence on the pool they choose. 
 
Cost per Epoch
The cost per epoch is a fixed fee that will be removed from the rewards generated and issued to the SPO (separate from the pool margin). This is incorporated to insure that the operational costs of running a full time node is covered. To put it simply, the Cost per Epoch is the SPO’s overhead and the pool margin is the SPO’s profit. The current minimum is 340 ADA per epoch. 
 
Produced Blocks
This is the amount of blocks that that the pool has produced. 
 
Rewards
The “Rewards” tab lists all your delegated wallets and the amount of rewards they have received in that wallet’s lifetime. There is also a function to export a CSV file for reference. 
Info
The ‘Info” tab shows the progress the Cardano Network has made in decentralizing. At the time of writing, Cardano is currently transitioning from a federated system operated by it’s creators to a decentralized system operated by a community of SPOs. The goal is 100% decentralization and in this tab, you can monitor the network’s progress. 
How to Delegate in Daedalus
In order to delegate a wallet to a stake pool, follow the below steps after you have booted up and sync Daedalus.

1. Navigate to the “Stake pools” section in Daedalus.

2. Navigate to the “Stake pools” tab.

3. Search for the Stake pool you wish to delegate to. Note: There is a search tool for easy access.

4. Click on the Stake pool ticker and click on the “Delegate to the pool” button. 

5. Choose wallet to delegate from. Note: a wallet needs to have a balance minimum of 10 ADA in order to stake. 

6. Confirm your stake pool selection. 

7. Confirm delegation with your spending password. Note: this will cost 2 ADA for delegation registration (locked in the network) + transaction fee. 

8. Delegation is confirmed.  

9. Delegated pools will show up on the “Stake pools” and the “Delegation center” page. Note: On the “Delegation center” page, you can re-delegate your wallet to another stake pool. The transition will take place in the next epoch. 

VI. Conclusion

This concludes the YUGTO Pool Daedalus tutorial. This tutorial will be updated as Daedalus matures and receives new features so be sure to check back in the future. If you found this tutorial valuable and would like YUGTO Pool to continue this initiative, please consider delegating to our pool (Ticker: YUGTO). 100% of our pool margin will be used to create and translate educational materials and advocate for the adoption of the Cardano ecosystem. For more help, feel free to reach out to us on Twitter at @yugtopool.
 
Thank you for reading!