Glossary · from the DESK dictionary
Staking
Locking up crypto assets to support a proof-of-stake network in exchange for rewards.
In plain words
Similar to a savings account — you lock up coins and earn a kind of interest in return.
In more detail
Staking denotes depositing tokens to secure a proof-of-stake network, for which the depositor receives a reward. Economically the reward is not an interest payment but a pro rata reissuance of tokens plus transaction fees. That is an important distinction: whoever does not stake is diluted by the issuance — the quoted yield is therefore partly just compensation, not genuine growth.
Example
A network pays a 5 percent staking reward with 3.5 percent issuance. Real growth in share of total supply is 1.5 percent — whoever does not stake loses 3.5 percent of share.
What it means for traders
An important passive income source in the proof-of-stake ecosystem, increasingly accessible via brokers/exchanges.
Common pitfalls
Staked assets are often locked for a period (an unbonding period), and validators can be 'slashed' (penalized) for misbehavior.
Related terms
Proof of Stake (PoS)
From the DESK dictionary. For information only, not investment advice.
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DESK is a research tool and not investment advice. Page generated: 2026-10-12.