To take advantage of the Shelley era, users must transfer their funds to a Shelley wallet. Before the Shelley Hard Fork, all wallets were Byron-era wallets, these have a 12-word recovery phrase and are fully compatible with the new code base, so users can still send and receive transactions using their old Byron wallets, but do not support stake delegation.
Shelley wallets have 24-word recovery phrases and are the only type of wallet that support stake delegation and rewards-earning.
As a Daedalus user, you can identify you Byron wallets by the flag shown next to the wallet's name. Shelley wallets, do not have that flag. Another difference is that Byron addresses start with the prefix DdzFFz while Shelley addresses start with the addr1 prefix.
Delegating doesn't mean giving up control of your funds.
Shelley wallets separate the control over the funds from the control of the rights to participate in the protocol, we achieve this by making each wallet to have two sets of keys:
Payment keys: Give to users the control over their funds, allowing them to create addresses to receive and hold funds and to sign transactions when they want to send funds to other addresses.
Stake keys. Allow users to sign delegation certificates and to create a stake address, used by the protocol to pay out rewards earned from stake delegation.
Note: For ease of use, all keys and addresses are automatically generated by Daedalus when a new Shelley wallet is created.
How to Delegate your stake using Daedalus:
Please see the video below to learn the process of delegating your wallet.
Note that delegating incurs in:
- Transaction fees for submitting the delegation certificate to the blockchain.
- Stake Key registration deposit of 2 ADA. This deposit is only made the first time you delegate your wallet. You get this deposit back when you unregister your key.