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
Staking Cycle DiagramShows the cycle of staking, validating, earning rewards, and optionally compoundingThe 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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