What is Staking: Earning Yield on Crypto
Staking locks crypto in a network to help validate transactions, earning rewards in return. Like "deposit interest" but with higher potential yields and risks.
TL;DR
Staking locks crypto in a network to help validate transactions, earning rewards in return. Like "deposit interest" but with higher potential yields and risks.
How Staking Works (PoS Mechanism)
In Proof of Stake (PoS) networks, validators stake tokens as collateral to validate transactions and earn rewards. Ethereum 2.0: requires 32 ETH to become a validator, ~3-4% APY. Malicious validators face "slashing" — losing part of their stake. Ways for regular users to stake: CEX staking (Binance/Coinbase/OKX): simplest, click to stake, but not truly non-custodial. Liquid staking (Lido/Rocket Pool): receive stETH or similar liquid tokens, usable in DeFi. DPoS (Delegated PoS): Cosmos/Solana — delegate to validators, share rewards.