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staking

Holding cryptocurrency to help run a blockchain network and earn rewards.

Staking is a way to earn cryptocurrency by participating in a blockchain network’s operations. Instead of relying on energy-intensive mining to validate transactions, many modern blockchains use a system called “proof of stake” where people lock up their coins as collateral. These participants, called validators, are chosen to verify transactions and create new blocks. In return, they earn rewards in the form of newly created cryptocurrency plus transaction fees.

When you see staking in headlines, it usually means someone is discussing how to earn passive income from crypto holdings, or how a blockchain is transitioning to this more energy-efficient system. The key tradeoff: your coins are locked up for a period and you take on the risk that the network punishes validators who misbehave by taking away some of their stake. It’s essentially a way blockchains incentivize people to keep the network honest.

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Written once as a plain-English reference, not as advice. Nothing here is a recommendation to buy or sell anything.

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