What Is Crypto Staking? How to Earn Rewards Safely
Crypto staking is the process of locking up coins to help operate a proof-of-stake blockchain, and earning rewards in return. It is roughly the crypto equivalent of earning interest, except the reward comes from securing the network rather than from a bank. Only coins that use proof-of-stake, such as ethereum and cardano, can be staked.
How staking works
Proof-of-stake networks rely on validators who lock up coins as a security deposit. Validators are chosen to confirm transactions, and honest work earns new coins as a reward. Dishonest behavior can cost a validator part of its stake, which keeps the network secure. Read how proof-of-stake fits into the bigger picture in our blockchain guide.
Ways to stake
| Method | Effort | Control | Best for |
|---|---|---|---|
| Exchange staking | Low | Custodial | Beginners |
| Staking pool | Low | Non-custodial | Smaller holders |
| Solo validator | High | Full | Technical users with large holdings |
Most beginners start with exchange staking because it takes a few clicks. More advanced users join a staking pool or run a validator to keep custody of their keys.
The risks to understand
- Lock-up periods. Some networks require a waiting time before you can withdraw, during which you cannot sell.
- Price risk. Rewards are paid in the coin you stake, so a falling price can wipe out the yield.
- Slashing. If a validator misbehaves or goes offline, part of the stake can be lost. Pools manage this for you.
- Custodial risk. Staking on an exchange means trusting that exchange with your coins.
How to start staking
- Buy a proof-of-stake coin such as ethereum. See how to buy crypto.
- Choose a staking method that matches your comfort with risk and custody.
- Confirm the lock-up period and reward rate before committing.
- Track your rewards and the coin’s price over time.
Frequently asked questions
Is crypto staking safe? Staking itself is low-risk on established networks, but you still face price risk and, on exchanges, custodial risk. Use reputable platforms.
How much can I earn from staking? Reward rates vary by network and change over time, often in the low single-digit to high single-digit percent range per year.
Can I lose money staking? Yes. If the coin’s price falls more than your rewards, or a validator is slashed, you can end up with less value than you started with.
Which coins can be staked? Only proof-of-stake coins, including ethereum, cardano, solana, and many others. Bitcoin cannot be staked.
Next steps
Learn the network design that makes staking possible in what is blockchain, then secure your staked coins with a proper crypto wallet.