Staking
Also known as staking rewards
Staking means locking up cryptocurrency to help secure a proof-of-stake network, either by running a validator or by delegating tokens to one. Stakers can earn rewards paid from new token issuance and transaction fees, but they also take on risks: penalties if the validator misbehaves, lock-up or withdrawal delays, price changes and, when using a third party, the risk of that provider failing. Reward rates vary by network and over time.
Related terms
- Proof of Stake Consensus secured by validators who put tokens at risk. Consensus
- Validator A proof-of-stake participant that proposes and confirms blocks. Consensus
- Liquid Staking Staking while receiving a tradable token for the staked deposit. DeFi
- Slashing A penalty that destroys part of a misbehaving validator’s stake. Consensus
- Consensus Mechanism The rules that let a network agree on one version of the ledger. Consensus
- Proof of Work Consensus secured by competitive computing work. Consensus
