Locking up cryptocurrency to support network operations and earn rewards.
Staking involves locking up cryptocurrency in a Proof-of-Stake network to help secure the blockchain and validate transactions. In return, stakers earn rewards such as newly issued tokens or transaction fees.
Staking replaces mining as the security backbone of PoS networks.
How Staking Works
Users lock tokens in a validator or staking pool
Validators confirm and propose blocks
Network rewards stakers for honest participation
Misbehavior may lead to slashing penalties
You can stake directly, through pools, or via exchanges.
Why People Stake
Earn passive income
Support network decentralization
Access governance rights
Reduce circulating supply, potentially stabilizing price
Risks
Lock-up periods
Slashing penalties
Validator downtime
Smart contract vulnerabilities in staking pools
Summary
Staking is the act of locking tokens to support a PoS blockchain and earn rewards, functioning as a core mechanism for network security.
