Staking, explained
The short answer
Staking means locking up coins to help secure a proof-of-stake network in exchange for rewards, with some risks and waiting periods attached.
What you’re actually doing
On a proof of stakeProof of stake A consensus method where validators lock up coins as collateral for the right to add blocks. network, validatorsValidator A participant in a proof-of-stake network who stakes coins and helps propose and confirm blocks. lock up coins as collateral to help confirm transactions. StakingStaking Locking up coins to help secure a proof-of-stake network in exchange for rewards. is taking part in that, either by running a validator yourself or by delegating to one through a wallet, exchange or staking service.
Where rewards come from
Rewards come from newly issued coins and a share of transaction fees. The staking yieldStaking yield The annual return stakers earn, usually shown as a percentage of the amount staked. depends on how much is staked in total and how busy the network is. When more people stake, each staker’s share shrinks and yields compress.
Ways to stake
| Method | Effort | Trade-off |
|---|---|---|
| Solo validator | High: hardware, uptime, 32 ETH on Ethereum | Full control, full responsibility |
| Exchange staking | Low | You trust the exchange with your coins |
| Liquid stakingLiquid staking Staking through a service that gives you a tradable token representing your staked coins. | Low | Tradable receipt token, but added smart-contract risk |
Risks
- Lock-ups and queues: leaving isn’t always instant. On Ethereum, withdrawals go through an validator exit queueValidator exit queue The waiting line Ethereum validators join when they stop staking, which limits how quickly stake can leave. that can stretch out when many validators leave at once.
- SlashingSlashing A penalty that destroys part of a validator's stake for breaking the network's rules.: validators that misbehave lose part of their stake, and delegators can share the loss.
- Price risk: a 4% yield doesn’t help much if the coin falls 30%.
Last reviewed Oct 3, 2026. Educational content only, not financial advice.