Staking means locking up cryptocurrency to help secure a proof-of-stake blockchain, in exchange for rewards. In proof of stake, validators are chosen to propose and confirm blocks based on the coins they have staked as collateral. Validators who behave honestly earn rewards; validators who cheat or go offline can lose part of their stake, which is called slashing. Ethereum, Solana, Cardano and many other networks use proof of stake.
Ways to stake
- Solo staking: running your own validator. On Ethereum this requires 32 ETH per validator, reliable hardware and constant uptime. Maximum control, but technically demanding.
- Delegated staking: on networks such as Solana and Cosmos, holders delegate their coins to a validator of their choice and share in its rewards, while keeping ownership.
- Staking pools and services: exchanges and staking providers run validators for you, often without minimum amounts, at the cost of a fee and, with custodial services, giving up control of your coins.
- Liquid staking: protocols that stake on your behalf and give you a liquid token representing your staked position, which you can still use in DeFi.
- Restaking: reusing staked assets to secure additional services in exchange for extra rewards, and extra risk.
Rewards and risks
Staking rewards come from newly issued coins and transaction fees, and vary by network and over time. The risks are real: slashing for validator misbehaviour or misconfiguration, lock-up and unbonding periods during which you can't sell, price risk because rewards are paid in the same volatile asset, smart contract risk with liquid staking and restaking protocols, and counterparty risk with custodial services. Rewards are taxed differently per country, so check the rules where you live.
Staking in DeFi
The word "staking" is also used loosely in DeFi for locking tokens in a protocol to earn rewards, for example in liquidity mining or governance. That is not network staking: the rewards come from the protocol, not from securing a blockchain, and the risks are those of the protocol. See our DeFi yield dashboards, position management tools and Solana development.
Frequently Asked Questions about Staking
Is staking the same as earning interest?
It looks similar, but the rewards are payment for helping secure a network, paid in the staked coin. Unlike a savings account, the value of both the stake and the rewards can fall.
What is slashing?
A penalty in which part of a validator's stake is destroyed for behaviour that harms the network, such as signing two conflicting blocks. Delegators to that validator can also be affected on some networks.
What is liquid staking?
Staking through a protocol that gives you a token representing your staked coins plus rewards. You can trade or use that token while your coins remain staked.
Can I unstake at any time?
Usually not instantly. Most networks have an unbonding or exit queue that can take days or longer. Liquid staking tokens can be sold sooner, but possibly at a discount.