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 helping secure the network rather than from a bank lending out deposits. Only coins that use proof-of-stake, such as ethereum and cardano, can be staked; proof-of-work coins like bitcoin cannot.

How staking works

Proof-of-stake networks rely on validators who lock up coins as a security deposit before they are allowed to confirm transactions. Validators are selected, often based on how much they have staked, to propose and verify new blocks. Honest work earns new coins as a reward, paid out from the network’s own issuance or transaction fees. Dishonest behavior, or simply going offline at the wrong time, can cost a validator part of its stake, a penalty known as slashing, which keeps the incentives aligned toward honest participation. Read how proof-of-stake fits into the bigger picture in our blockchain guide.

Ways to stake

You do not need to run your own validator to participate. Most holders choose one of three routes, trading convenience against control.

Most beginners start with exchange staking because it takes only a few clicks and the exchange handles the technical side entirely. More advanced users join a staking pool, which combines many smaller holdings to meet a validator’s minimum while letting participants keep custody of their own keys, or run a solo validator to keep full control and capture the full reward without sharing it with a pool operator.

The risks to understand

• Lock-up periods. Some networks require a waiting time before you can withdraw staked coins, during which you cannot sell even if the price moves against you.
• Price risk. Rewards are paid in the coin you stake, so a falling price can wipe out the yield entirely, or turn what looks like a gain in coin terms into a loss in real value.
• Slashing. If a validator misbehaves or goes offline for an extended period, part of the stake can be lost. Reputable pools manage this risk for you, but it is worth understanding before committing funds.
• Custodial risk. Staking on an exchange means trusting that exchange with your coins for the duration of the stake, on top of the normal risks of holding funds on any platform.
• Smart contract risk. Staking pools and liquid staking services often rely on smart contracts, which can contain bugs. Sticking to well-established, widely used platforms reduces this exposure.

Custodial vs non-custodial staking: which to choose

If you are new to crypto and simply want to earn a return on coins you already plan to hold, exchange staking is the lowest-friction option and a reasonable place to start, provided you use a reputable, regulated platform. If you already keep your coins in your own wallet and want to avoid handing custody to an exchange, a staking pool through a non-custodial wallet lets you earn rewards while keeping your keys. Running your own validator only makes sense once you have both the technical comfort and enough capital to meet a network’s minimum stake, since the effort of running reliable, always-online infrastructure is not trivial.

How to start staking

1. Buy a proof-of-stake coin such as ethereum or solana. See how to buy crypto for the full buying process.
2. Choose a staking method that matches your comfort with risk, technical effort, and custody, using the comparison above as a starting point.
3. Confirm the lock-up period, minimum stake, and expected reward rate before committing any funds.
4. Move coins you are not staking to a secure wallet rather than leaving everything on one platform.
5. Track your rewards and the coin’s price over time, since the real return depends on both.

Frequently asked questions

Is crypto staking safe?
Staking itself is low-risk on established, well-audited networks, but you still face price risk and, if staking through an exchange, custodial risk. Stick to reputable platforms and well-known coins.

How much can I earn from staking?
Reward rates vary by network, by how much total value is already staked, and change over time. There is no fixed rate across crypto, so always check the current terms on the specific platform or network before committing.

Can I lose money staking?
Yes. If the coin’s price falls by more than your rewards, or a validator you are staked with is slashed, you can end up with less value than you started with, even though your coin balance may have grown.

Which coins can be staked?
Only proof-of-stake coins, including ethereum, cardano, solana, and many others. Bitcoin cannot be staked because it uses proof-of-work instead.

Can I unstake at any time?
It depends on the network and method. Some allow near-instant unstaking, while others impose a mandatory waiting period before withdrawn coins become available.

Is staking the same as trading?
No. Staking is a passive way to earn rewards on coins you already intend to hold, while trading involves actively buying and selling to profit from price movement. The two can be combined, but they carry different risks.

Next steps

Learn more about the network design that makes staking possible in our blockchain primer, then keep your staked coins secure using the wallet practices covered above once your lock-up period ends.