GLOSSARY // Crypto
Staking
Staking is locking up coins to help secure a proof-of-stake blockchain, and earning a reward for doing it. Your stake acts as collateral: validate honestly and you earn yield, act maliciously and the network can slash part of your stake.
The advertised yield is not free money. It is paid partly in newly issued coins, so if the network is inflating supply faster than the yield, your share of the network can shrink in real terms even as your coin count grows. Locked coins may also be unstakeable for days or weeks, during which the price can move against you.
Staking Ethereum might quote about 3.5% a year. Stake 10 ETH and you accrue roughly 0.35 ETH over a year — but if ETH's price halves during that time, the dollar value of your position still falls far more than the reward adds.
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Educational only — not financial advice. Definitions simplified for clarity; markets are messier than definitions.