Staking

Staking is locking up cryptocurrency to help operate and secure a proof-of-stake network. In return for putting capital at risk and behaving honestly, stakers earn rewards, typically paid in the same token.

How it works

A validator deposits the network’s token as collateral and runs software that proposes and confirms blocks. Users who do not want to run a validator can often delegate their tokens to one and share in the rewards. Misbehaviour or extended downtime can be penalised by “slashing” part of the stake, which keeps validators aligned with the network’s rules.

Why it matters

Staking replaces mining’s energy cost with economic commitment, and it gives long-term holders a way to earn yield while supporting the network. The trade-offs are lock-up periods, the risk of slashing, and reliance on the chosen validator’s reliability.

Example

Ethereum holders can stake to help secure the network, either by running a validator or by delegating through a staking service.