Staking is rapidly becoming one of the key ways to earn income from cryptocurrencies. It allows users to receive passive rewards while simultaneously contributing to the operation and security of the blockchain. As staking gains popularity, it gradually replaces mining in modern networks and opens new opportunities for investors regardless of their experience or capital.
The transition of the crypto industry from the Proof-of-Work (PoW)consensus mechanism to the more sustainable Proof-of-Stake (PoS) has become a logical step in blockchain evolution. In PoS networks, miners were replaced by validators*, and network rewards are distributed through the staking mechanism.
* Validators are blockchain participants who verify transactions, create new blocks, and maintain network security. Unlike miners in PoW networks, validators do not use computational hardware — they gain the right to process blocks by locking their own tokens in the network (staking them), thereby proving their involvement and reliability.
What is staking?
Staking is a method of earning cryptocurrency in which a user locks a certain amount of tokens in the network for a specified period. In return, they receive rewards for helping maintain blockchain security and operations.
In essence, staking resembles a bank deposit: the user locks their funds and receives fixed or variable rewards. However, unlike traditional deposits, where funds are fully controlled by the bank, in staking, the investor retains complete control over their assets.
The funds are not transferred to intermediaries, are not stored by third parties, and remain in the user's wallet or under their direct control. The blockchain simply "freezes" these tokens for the duration of the staking period.
Additionally, staking is a crucial part of the economic model of most PoS networks: the more users participate in staking, the higher the decentralization, stability, and throughput of the blockchain. This makes staking not just a way to earn, but also a mechanism that directly influences the overall "health" of the network.
Main types of staking
Direct staking (validation)
This option is available only to validators. It typically requires:
A high minimum number of tokens,
Technical equipment requirements,
The need to maintain a high uptime*.
* Uptime is the amount of time a validator's node operates without interruption. In simple terms, it's the percentage of time the validator remains available, stable, and successfully processes transactions. The higher the uptime, the more reliable the validator and the higher the rewards they earn.
Delegated staking
The most accessible form of staking. A user delegates their tokens to a chosen validator, increasing their voting/stake weight in the network. In return, the user receives a portion of the validator's rewards.
Advantages of delegated staking:
Low entry threshold — you can start even with a small amount,
No technical knowledge required,
Easy to switch to another validator if needed.
Delegation also reduces centralization risks: a wide distribution of staked tokens among many users makes the network more resistant to manipulation.
Why staking is becoming more popular
Staking demand grows along with the expansion of PoS networks.
According to Dune Analytics:
In July 2025, the total amount of staked Ethereum reached 36 million ETH,
Over two years, this figure increased by 1.5×.
Similar trends are observed in Solana, BNB Chain, and other PoS networks.
Advantages of staking
High security. Unlike PoW networks, which are vulnerable to 51% attacks and double-spending, PoS blockchains require participants to lock their own tokens. This makes malicious activity extremely expensive and unprofitable. Furthermore, the more funds are staked in a network, the harder it is to attack and the higher the overall security level.
Passive income. Once tokens are delegated, users do not need to take further action — rewards accumulate automatically.
Ease of participation. No need for expensive hardware or specialized technical skills, unlike mining.
Potential profit growth. If the price of the staked token increases, the investor benefits from both staking rewards and the asset's appreciation.
Low entry threshold. Many networks allow staking with as little as one token.
Risk hedging. Even if the price of the cryptocurrency drops, investors still receive staking rewards, partially offsetting losses and reducing overall risk.
Predictable income: many networks publish their estimated annual percentage rate (APR), making long-term planning easier.
Disadvantages and risks of staking
Lock-up period (unstake period). In different blockchains, token lock-up times vary significantly — from a few days to several weeks. During this period, the user cannot withdraw or sell tokens, which is critical during sharp market downturns.
Validator-related risks. Delegators may lose part of their rewards if the selected validator operates unreliably or behaves maliciously. Therefore, it is crucial to choose validators with close to 100% uptime.
Technical risks. Vulnerabilities in smart contracts or blockchain-level failures can, in theory, result in partial fund loss.
Reward dilution risk. As more users stake their tokens, the base network reward often decreases — this is a built-in balancing mechanism.
Where staking is available
Staking is available on blockchains that use the Proof-of-Stake consensus mechanism and its variants (DPoS*, BFT*). The largest and most popular networks include Ethereum, Solana, BNB Chain, Sui, Hyperliquid, Cardano, Tron, and Bitcoin — via restaking protocols such as Babylon and Lombard Finance.
* DPoS (Delegated Proof-of-Stake) — a consensus model where users do not validate directly but delegate their tokens to elected representatives (validators).
* BFT (Byzantine Fault Tolerance) — a class of algorithms allowing a blockchain to continue operating even when some nodes act incorrectly or maliciously. In PoS networks, BFT ensures resilience against "Byzantine errors," meaning situations where specific nodes lie, malfunction, or behave unpredictably.
How staking works in practice
Before staking cryptocurrency, the user must create a crypto wallet and deposit the required tokens depending on the chosen network — for example, ETH for Ethereum or SOL for Solana.
Once the tokens have been received in the wallet, staking can begin: the user selects a validator and delegates their stake following the provided instructions.
Many wallets allow users to stake directly through their interface, including Ledger, Trezor Safe 5, and Trust Wallet.
Staking is also available through specialized platforms maintained by major validators — such as Everstake, Quicknode, and Citadel.one.
Additionally, centralized exchanges and services such as Binance, Coinbase, Kraken, OKX, and Huobi support staking. Their main downside is a lower yield than native on-chain staking. However, they offer an essential advantage: these platforms often take responsibility and may compensate users in case of technical failures or network attacks.
Withdrawing tokens from staking is just as simple: open the wallet or platform, locate the asset, and click the unstake button. The unlock period then begins, after which the tokens become available again.