Staking
Locking up tokens to help secure a proof-of-stake network and earn rewards, similar to interest on a deposit.
Staking commits your coins to a blockchain that runs on proof of stake. Validators put tokens at risk as collateral for honest behavior, and in return they earn newly issued rewards. Most holders stake by delegating to a validator rather than running one themselves.
Ethereum's reward sits in the low single digits annually; some networks pay more. The catch is lockup and slashing. Act maliciously or go offline and part of your stake can be destroyed. Staked tokens may also be unavailable to sell during a sharp market drop.
Related terms
A consensus method where validators lock up coins as collateral instead of burning electricity to secure the chain.
ValidatorA participant in a proof-of-stake network that proposes and confirms blocks, putting staked coins at risk for honesty.
Liquid StakingStaking tokens while receiving a tradable receipt token, so your capital keeps earning rewards without being locked up.
Delegated Proof of Stake (DPoS)A variant where coin holders vote for a small set of delegates who produce blocks on their behalf.