The crypto world is constantly evolving, and more investors are looking for ways to earn not only from buying and selling, but also from simply holding their coins. One of the most popular options is staking – locking up your crypto in a network to earn rewards. Many compare it to earning interest on a bank deposit, only this time it happens in the decentralized blockchain world.
In this article, we’ll explain step by step:
What staking is and how it works.
Why it’s important in blockchain networks.
How you can earn through staking.
The pros and risks.
How to safely get started yourself.
1. What exactly is staking?
Simply put, staking means locking a certain amount of cryptocurrency in a network to help secure and operate it. In return for this contribution, the user receives rewards – new coins.
Staking is mainly used in Proof-of-Stake (PoS) blockchains. Unlike Bitcoin, which uses Proof-of-Work (PoW) and requires massive energy consumption to validate transactions, PoS networks use validators – users who have staked their coins.
Validators are randomly chosen to confirm transactions and receive rewards. The more coins you stake, the higher your chances of being selected and earning rewards.
2. How does staking work in practice?
Imagine you have 1000 ADA (Cardano coins).
If you just keep them in your wallet, their value changes with the market, but you don’t earn anything extra.
If you stake them, then:
You still own the coins (you don’t lose them).
The network uses them to function.
You earn rewards – for example, 4–6% annually in ADA.
It’s similar to earning interest on a bank deposit, but with more flexibility and options to choose different networks and reward rates.
3. Which coins can be staked?
Not all cryptocurrencies support staking – only those that use Proof-of-Stake or similar mechanisms. Popular ones include:
Ethereum (ETH) – since the 2022 merge to PoS. Rewards: 3–6% yearly.
Cardano (ADA) – one of the earliest PoS coins. Rewards: ~4–5%.
Polkadot (DOT) – flexible staking, ~10–14%.
Solana (SOL) – very fast network, ~6–8%.
Tezos (XTZ) – popular delegated staking, ~5–6%.
BNB (Binance Coin) – staking available via Binance Earn.
Reward rates vary depending on the network, staking type, and chosen platform.
4. Types of staking
There are several ways to stake, each with its pros and cons.
1. Exchange staking (via exchanges)
Just hold coins on Binance, Bybit, KuCoin, Kraken, etc.
The exchange does everything for you.
Pros: easy, quick.
Cons: you trust the exchange, not fully in control of your coins.
2. Wallet staking (through your own wallet)
Hold coins in your wallet, e.g. Ledger, Trezor, Daedalus (Cardano), Phantom (Solana).
You choose the staking pool (validator).
Pros: full control of your funds.
Cons: more complicated for beginners.
3. Cold staking
Coins are locked in a cold wallet (e.g. Ledger).
Very secure, since they’re offline.
Ideal for long-term investors.
4. Liquid staking
A newer option – you receive tokens representing your staked coins (e.g. Lido ETH → stETH).
You can trade these tokens while your ETH keeps earning staking rewards.
Pros: liquidity.
Cons: higher risk, depends on an additional platform.
5. Why is staking popular?
Passive income – earn without active trading.
Network security – supports blockchain operations.
Lower risk than trading – if the market falls, you still keep your coins (though their value may drop).
Long-term strategy – staking is attractive for believers in a coin’s future.
6. What are the risks?
Although safer than trading, staking has risks:
Price drops – if the coin loses value, your rewards might not cover the loss.
Centralization – exchange staking depends on third parties.
Slashing risk – in some blockchains, validators may lose coins for mistakes (usually affects validators, not delegators).
Liquidity limits – sometimes coins are locked for a set period (e.g. ETH staking before the Merge).
7. How to start staking?
Step by step:
Choose a coin to stake (ETH, ADA, DOT, etc.).
Select a platform – exchange (Binance, Bybit, Kraken) or wallet (Ledger, MetaMask, Phantom).
Buy the coins via an exchange.
Move them to your wallet (if staking yourself).
Choose a staking pool or activate staking via the exchange.
Monitor your rewards – usually paid daily or weekly.
8. Is staking worth it?
Staking is great for those who don’t want the stress of day trading. It allows you to:
grow your coin balance steadily,
increase long-term profits,
contribute to network security.
Of course, it’s not quick money. If the market crashes, your coins may lose value. But as a long-term strategy, staking is one of the safest ways to earn passive income in the crypto world.
Conclusion
Staking is like a “crypto savings account”. You hold coins, let the network use them, and earn rewards in return. It’s not risk-free, but it’s much more stable than active trading.
If you want to start, the safest approach is to:
pick a reliable coin (ETH, ADA, SOL),
use a secure wallet or a trusted exchange,
and only stake what you’re comfortable holding long term.