ADA held on the Cardano network represents a user’s stake in the protocol, the size of which is proportional to the amount of ada held.
Users who hold a stake in Cardano can earn passive rewards for validating blocks. The amount of rewards they can earn is proportional to the amount of ada they pledge or delegate to a stake pool.
Staking is a way for delegators to earn a passive income each time a block is forged by the pool they are staking with. It is important to note that this passive income comes on top of capital gains achieved through ADA price appreciation.