What is a Stake?

ADA held on the Cardano network represents a stake in the network, with
the size of the stake proportional to the amount of ADA held. The
ability to delegate or pledge a stake is fundamental to how Cardano
works.

There are two ways an ADA holder can earn rewards: by delegating their
stake to a stake pool run by someone else, or running their own stake
pool. The amount of stake delegated to a given stake pool is the primary
way the Ouroboros protocol chooses who should add the next block to the
blockchain, and receive a monetary reward for doing so.

The more stake is delegated to a stake pool (up to a certain point), the
more likely it is to make the next block and the rewards are shared
between everyone who delegated their stake to that stake pool.

What is Stake Delegation?

Delegation is the process by which ada holders delegate the stake
associated with their ada to a stake pool. It allows ada holders that do
not have the skills or desire to run a node to participate in the network
and be rewarded in proportion to the amount of stake delegated.