Staking lets you earn rewards by helping secure proof-of-stake networks.
1. Lock up your tokens as collateral
2. Network randomly selects validators to propose blocks
3. Validators earn rewards for honest behavior
4. Malicious validators lose their stake (slashing)
Native Staking (Solo)
- Run your own validator
- Requires 32 ETH for Ethereum
- Maximum rewards, full control
- Technical knowledge needed
Delegated Staking
- Delegate to existing validator
- No minimum (depends on protocol)
- Validator takes small fee
- Available on Cosmos, Solana, etc.
Liquid Staking
- Stake through protocol like Lido
- Receive liquid token (stETH) in return
- Can use in DeFi while staking
- Protocol takes small fee
Exchange Staking
- Stake through Coinbase, Kraken, etc.
- Easiest option
- Exchange takes larger fee
- Not your keys
Typical APY: 3-12% depending on network
Risks:
- Lock-up periods (can't sell immediately)
- Slashing (if validator misbehaves)
- Price volatility (rewards don't matter if price drops 50%)
- Smart contract risk (liquid staking)
For beginners: Start with liquid staking (Lido, Rocket Pool) or reputable exchange staking.