Ouch. That hurts!

The team here at DAD Stakes has been involved in cryptocurrency for years now. It is a fast moving space that is both fun and rewarding. We've learned a ton, we've had our minds blown, we've cried, we've laughed and we've made some (maybe even many) mistakes along the way.

We want to share those mistakes with you in the hopes of making your dive into Cardano as pain-free and rewarding as possible. Here is a cautionary tale of an ADA buying mistake from one of our founders.

What's the exchange got to do with it?

Not all exchanges are created equal. Many exchanges give you the ability to "buy" and "sell" crypto, but you can never withdraw the crypto from the exchange. You can read more about that here but the TLDR is that its important to be able hold your own crypto.

Many years ago, after much due diligence and hard earned conviction of Cardano, one of our founders was ready to take the plunge. He wanted to buy ADA. So, he signed up with eToro and he purchased some ADA.

What's the big deal?

eToro does not currently support the withdrawal of ADA. In order to get your coins out of eToro you have to sell your crypto back for your base currency such as USD. This resulted in a taxable event (sale of crypto) and downtime to transfer funds from the eToro account back to a bank account which was then followed by a transfer up to an exchange such as Binance.us to repurchase those coins. Like woa.

This is not unique to eToro. Many exchanges do not allow you to withdraw your coins. Robinhood is another. Although Robinhood has plans to allow withdraws and deposits in the future. To be safe, its best to not purchase your coins from these exchanges until that functionality is supported.

Wait, that isn't all...

In addition, when staking went live with the launch of the Shelly mainnet, eToro charged a variable fee based upon your portfolio funds with them to stake your ADA. This resulted in additional losses of up to 25% of the staking rewards due to being stuck on eToro. That is a total bummer.

To Sum It Up

This is why our team highly recommends only buying ADA from an exchange that has been verified for crypto withdrawals. That way you have full control over your crypto and can pick the best stake pool that meets your needs like Dad Stakes.

Check out our post on How to Buy Cardano for best practices and more insights.