DefineDeFiWeb3 Glossary

Staking

Locking up your crypto to help run a blockchain network. In return, you earn rewards - like earning interest for helping keep the system running.

Example

Locking 32 ETH to become an Ethereum validator and earning about 4% yearly for processing transactions.

Related Terms

Core Concepts
Cryptocurrency Staking Cycle DiagramCryptocurrency staking diagram showing the cycle of staking, validating, earning rewards, and optionally compounding in DeFiThe Staking CycleSTAKELock ETHDeposit 32 ETH (or any)VALIDATESecureHelp processtransactionsEARNRewards~3-5% APY in new ETHCHOICECompoundor ExitOptions:β€’ Restake rewardsβ€’ Unstake (1-5 days)πŸ’‘ Liquid StakingGet stETH/rETH tokenStay liquid whileearning rewards

βš™οΈHow It Works

  1. 1

    Choose Method

    Decide between solo staking, staking pools, or liquid staking

  2. 2

    Lock Tokens

    Deposit your crypto into a staking contract or validator

  3. 3

    Validate

    Your stake helps secure the network by backing honest validators

  4. 4

    Earn Rewards

    Receive new tokens as rewards for helping secure the network

  5. 5

    Unstake

    Request withdrawal (may have a waiting period depending on the network)

πŸ“ŠKey Numbers

3-4%
ETH Staking APY
current approximate yield
30M+
Total ETH Staked
ETH locked in staking
32 ETH
Solo Stake Minimum
to run your own Ethereum validator
1-5 days
Unstaking Time
typical exit queue wait on Ethereum

βš–οΈStaking Methods Compared

Featuresolopoolliquid
Minimum Amount32 ETH0.01 ETHAny amount
Technical SkillHighLowVery Low
RewardsHighestMediumMedium (minus fee)
LiquidityLockedLockedTradeable
Slashing RiskYou bear itSharedShared

πŸš€Getting Started

  • 1For small amounts: Use liquid staking (Lido, Rocket Pool) - no minimum required
  • 2For medium amounts: Join a staking pool that handles the technical setup
  • 3For 32+ ETH: Consider solo staking for maximum rewards and decentralization
  • 4Always research the slashing risks and lock-up periods before staking
  • 5Start small to understand the process before committing larger amounts
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