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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.