Staking is the act of locking up a cryptocurrency to help operate and secure a proof-of-stake network. In exchange for committing coins as collateral, participants — or the validators they delegate to — earn rewards, usually paid in the same coin. It is the proof-of-stake counterpart to the work miners perform on proof-of-work chains.
The rewards are not free money. Staked coins are often locked for a period and cannot be sold during a downturn, and a network can "slash" — confiscate part of — a stake if its validator misbehaves or goes offline. On top of that, the coin itself can fall in value by more than the reward pays.
A quoted staking yield is therefore best read as compensation for taking on those risks, not as a guaranteed return. Always check the lock-up terms and who controls the keys before staking.
Worked example
Staking ETH helps secure the Ethereum network and pays a variable reward, but the staked coins stay exposed to ETH's price swings the entire time.
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This definition is general education, not investment advice. Markets — especially crypto — are volatile and you can lose money. Please read our disclaimer and see our methodology.