What it is
Staking involves locking up a specific amount of cryptocurrency, such as Ether (ETH), to participate in a Proof of Stake (PoS) blockchain's consensus mechanism. By staking, participants, known as validators, help secure the network by processing transactions and creating new blocks. In return for their service and commitment, validators receive newly minted coins and transaction fees as rewards, incentivizing their honest participation.
Retail investors can stake their ETH directly if they meet the minimum requirements (e.g., 32 ETH for Ethereum) or by pooling their assets with others through staking services or liquid staking protocols. Staking can offer a yield on held assets but comes with risks, including potential penalties (slashing) for validator misbehavior or smart contract vulnerabilities. Investors monitor staking yields and participation rates to assess network health and potential returns.
Why it matters
Staking lets you earn passive income on crypto, but involves risks like asset lock-up and potential slashing.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice