What Is Staking?
Published June 2025 · Last reviewed August 2026
Staking is the process of locking up cryptocurrency to support the operations of a blockchain network. In return, stakers earn rewards, typically expressed as an Annual Percentage Yield (APY).
How Staking Works
In Proof of Stake (PoS) blockchains, validators are chosen to create new blocks based on the amount of cryptocurrency they have staked. Staking serves as collateral—validators who act maliciously or fail to properly validate transactions risk losing their staked funds (a process called "slashing").
Benefits of Staking
- Passive Income: Earn rewards on your cryptocurrency holdings.
- Network Security: Staking helps secure the blockchain network.
- Energy Efficient: PoS requires significantly less energy than Proof of Work mining.
Risks
- Lock-up Periods: Some networks require staked funds to be locked for a specific duration.
- Slashing: Validators can lose staked funds for misbehavior or technical failures.
- Market Risk: The value of staked assets can still decline due to market conditions.
Where to Stake
You can stake through cryptocurrency exchanges, dedicated staking platforms, or by running your own validator node. Each method offers different trade-offs between convenience, control, and rewards.
Mike Starr
Founder, CryptoWizardTools · M.S. Organizational Management
Last reviewed: August 2026